MAY-JUNE 2014

LEED-ING the WayARIZONA’S

TOP-SCORINGBUILDINGS

Maricopa County Downtown Court Tower

Inside:HealtHcare revolution:

Arizona bracesfor change

capital M:Where’s the

money for CRE?

valley partnersHip:

The voice ofresponsible

development

In Arizona, please contact

Paul M. Weiser, Esq.480.383.1823

pweiser@buchalter.com16435 North Scottsdale Road, Suite 440

Scottsdale, Arizona 85254-1754

www.buchalter.com

WhenYouNeedDirection

Today’s dynamic commercial real estate environment presents real estate owners, managers, developers, lenders and investors with exciting opportunities. Buchalter Nemer real estate attorneys offer sound professional advice and

guidance, when you need direction.

A STATE OF CHANGE

When I moved to the Valley seven years ago to attend Arizona State University, everything looked much different. There wasn’t a Salt River Fields, a CityScape or even a light rail. In just under a decade, and during one of the best and worst times for commercial real estate, I’ve been privileged to see the Phoenix Metro area rise out of the ground or fill empty spaces.

A lot of this growth wouldn’t be possible without the partnerships and advocacy supported by nonprofit Valley Partnership. You can read all about the organization, a who’s who of the development community, in our annual supplement (pages 57 to 72).

If you’re looking for even more people to thank for recent growth, flip to page 36, where we profile the Arizona Association for Economic Development (AAED) Economic Development Distinguished by Excellence (EDDE) award winners.

Perhaps one of Arizona’s largest claims of success is its strides in alternative energy. Summer is nearly here, and the sun is on everyone’s mind. Though, for Arizona’s leaders in solar and geothermal energy that’s always the case. Read about the biggest energy projects in the state and check out the top 10 highest-scoring LEED certified buildings in Arizona over the last 12 months.

Whether the story of The Rockefeller Group’s building a legacy in Arizona catches your eye or an update on healthcare growing into its changing landscape, this issue is full of stories about the changing state of Arizona.

Enjoy!

2 | May-June 2014

AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95. Bulk rates available. ©2014 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

President and CEO: Michael Atkinson Publisher: Cheryl GreenVice president of operations: Audrey Webb

EDITORIALEditor in chief: Michael GossieAssociate editor: Amanda VenturaInterns: Jacob Green | Jesse Millard Sara Parker | Leslie K. Hughes

Az BUSINESS MAGAzINESenior account manager: David Harken Account managers: Ann McSherry | Shannon Spigelman

ARTArt director: Mike MertesGraphic designer: Shavon ThompsonPhoto intern: Courtney Pedroza

DIGITAL MEDIA Web developer: Eric Shepperd Digital manager: Perri Collins

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OFFICESpecial projects manager: Sara FregapaneExecutive assistant: Mayra RiveraDatabase solutions manager: Cindy Johnson

SCOTTSDALE LIVING MAGAzINE

AzRE | ARIzONA COMMERCIAL REAL ESTATEDirector of sales: Steve Koslowski

Az BUSINESS LEADERSDirector of sales: Jeff Craig

RANKING ARIzONA Director of sales: Sheri King

EXPERIENCE ARIzONA | PLAy BALLDirector of sales and marketing: Zoe Terrill

Az BIG MEDIA HOME SHOWSSCOTTSDALE HOME & GARDEN SHOWSExhibit directors: Kerri Blumsack | Tina Robinson

Amanda VenturaAssociate editor, AZREamanda.ventura@azbigmedia.com

4 | May-June 2014

NEXT ISSUEMost Influential Women in CRETucson Market UpdateArizona Builders' Alliance

Free AZRE app for android online with this QR code

3101 N. Central Avenue Suite 1070Phoenix, Arizona 85012(602) 277-6045azBIGmedia.com

02 Editor’s Letter06 New to Market Projects in the pipeline

10 Planning & Zoning P&Z updates throughout Arizona

11 Project News 14 After Hours Janis Bladine, a homesteading attorney

16 Executive Voices Making way for e-commerce

18 Big Deals Top sales and leases since February, and the brokers who made them

22 Healthcare in transition32 USGBC Buildings LEED-ing the way

40 Seeing Green It's high time to finance real estate

48 Westward Ho The Rockefeller Group's Arizona Impact

57 Valley of Partnerships

CONTENTS

FEATURES

On The Cover: Maricopa County Downtown Court Tower, designed by Gould Evans.

06 1411

22 57

48

COVER

Corrections: Parsons-Tynan Group was inaccurately listed as the broker of the RED Award for Best Hospitality Project. It was the project manager.

The top industrial transaction, Warner Business Center, listed in “Big Deals” should have included Tom Richards, Voit, as the listing broker instead of Cushman and Wakefield’s Chris Toci and Chad Little.

6 | May-June 2014

1 | Banner estrella Medical center expansion and renovationsdeveloper: Banner HealthGeneral contractor: McCarthy Building Companies, Inc.architect: SmithGroup JJRlocation: 9201 W. Thomas Rd., Phoenixsize: 279KSFvalue: $161Mstart/coMpletion: August 2012 to April 2015; Tower addition completedin March 2014suBcontractors: University Mechanical, Wilson Electric, E&K of Phoenix, KT Fabrication, Able Steel

Expansion of the Banner Estrella Medical Center includes a second six-story, 279KSF patient tower, which adds 178 new patient beds to the campus. Within the new patient tower, the lower level through fourth floor will be completely built out, and the fifth and sixth floors will be shelled for future build-out as a patient division allowing the entire facility to ultimately offer the community a total of more than 400 patient beds. As nearly 100,000 patients passed through the Banner Estrella emergency room last year, the hospital was in dire need of a capacity increase. The new tower will contain additional obstetrical suites, additional neonatal intensive care unit capacity, new cardiac catheterization lab, additional medical imaging capabilities and added surgical suites. Approximately 97KSF of renovation is also planned within the existing facility now that the patient tower is occupied. Crews are remodeling the hospital’s existing emergency department, pharmacy, lab, materials management and culinary area. To accommodate the new patient tower, Banner also expanded the central plant. The project also included the construction of two additional parking structures, accommodating approximately 800 spaces for visitor and staff use. The nearly 300KSF project is expected to generate hundreds of construction jobs over three years.

HEALTHcARE2 | Four points By sheraton phoenix-Mesa Gateway airport hotel & toka sticks GolF cluB projectdeveloper: Wild Horse Pass Development AuthorityGeneral contractor: W.E. O’Neil Constructionarchitect: RSP Architectsproject ManaGeMent FirM: TynanGroup, Inc.location: Adjacent to the Phoenix-Mesa Gateway Airportsize: 74KSFvalue: WNDstart/coMpletion: February 2014 to early 2015

The new Four Points by Sheraton will be a 74KSF, 134 key, six-story hotel owned by the Gila River Indian Community and developed by the Wild Horse Pass Development Authority. The hotel will be managed by Starwood and will fly under the Four Points flag. The hotel is the key anchor of the Toka Sticks development, and the facility will include a bar & restaurant, private dining, fitness room, 2KSF of meeting and event space (indoor and outdoor) and is scheduled to open early 2015. The historical 160-acre Toka Sticks 18-hole golf course will receive several upgrades, and boast a new replacement 3,900 SF club house, pro shop, grill and patio, along with a state of the art 4KSF cart barn, scheduled to be completed late 2014. The existing Toka Sticks Golf Course will remain open during construction. A convenience store/fuel station is also included as part of the Toka Sticks development, and will incorporate the former Toka Sticks Smoke Shop with a convenient drive-thru option. The 4KSF convenience store and fuel station is scheduled to open later this year.

3 | av-air, inc. corporate headquartersdeveloper: Sun State BuildersGeneral contractor: N/Aarchitect: Balmer Architectural Grouplocation: 6877 W. Frye Rd., Chandlersize: 162,500 SFBrokeraGe FirM: Lee & Associates Arizonavalue: $15Mstart/coMpletion: Q1 to Q4 2014

The new buildings will consist of a 92,500 SF building with 20KSF of office space and a 70KSF building storage/distribution building. Both buildings will feature metal deck, steel trusses, 30-foot clear height, grade level and truck well loading doors.

HosPITALITy

MIxED-UsE

New to Market

4 | the standarddeveloper: Trinsic DevelopmentGeneral contractor: Adolfson & Peterson Constructionarchitect: ORB Architecturelocation: N. 69th and Main streets, Scottsdalesize: 172KSFvalue: $17Mstart/coMpletion: April 2014 to July 2015

The Standard is a 172KSF market-rate apartment development on a three-acre site in Scottsdale (adjacent to the historic Hotel Valley Ho). The development will contain 134 units of high-end apartments with below grade parking.

5 | seven apartMentsdeveloper: NextGen ApartmentsGeneral contractor: NextGen Constructionarchitect: Eric Miller Architectslocation: 7th Street and 101 Freeway, Phoenixsize: 216 unitsvalue: WNDstart/coMpletion: February 2014 to April 2015suBcontractors: Mechanical- RT Brown, Grading and drainage – S&S Paving, Plumbing – JBS Plumbing, Underground – Levake Construction

SEVEN Apartments will feature three-story garden-style apartments with a mix of one-, two- and three-bedroom units. The Clubhouse will provide resort style amenities with a swimming pool, fitness center, barbecues, fire pit and game room.

The unit features will include layouts with open floor plans, island kitchens, walk-in closets, laundry rooms and natural light.

MULTI-FAMILy

New to Market

7

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10 | May-June 2014

´ CiTy OF COOlidGEThe City of Coolidge Planning and Zoning Commission

was presented with a draft of the new Coolidge 2025 General Plan for review at the beginning of March. The presentation of the draft document initiates a two-month review period, during which edits may be made to the document, where considered appropriate, in order to produce a final version to be approved by the Coolidge City Council. Once approved, the document will be sent to the state and Coolidge voters will decide whether to approve it at the general election ballot in November. What makes this general plan different from past plans is that its creators have included simpler and more inclusive, f lexible land use classifications. Land use classifications have been reduced from 17 categories to six: agriculture, rural ranchette, urban neighborhood, downtown core, business and commerce, and industrial and manufacturing. The urban neighborhood classification includes all residential uses, offices, stores and restaurant, and churches but would not allow for large shopping malls or retail/employment centers which are restricted to the business and commerce classification.

´ CiTy OF GlENdAlE In 2009, the Tohono O’odham Nation proposed plans to

build a casino on a county island near 95th and Northern avenues near Glendale’s Westgate Entertainment District. The issue was presented to the City of Glendale in the form of House Resolution 1410, which would block the building of casinos on land within metro Phoenix designated as reservation after April 2013. Existing agreements between the state and Native American Communities seem to have limited or capped the number of Phoenix metro casinos and proponents of the bill have indicated that the proposed casino would violate the agreement. However, a federal judge has ruled that the nation’s planned casino would not violate the agreement. In its March session, the city council opposed the bill in a 4-3 vote. The vote indicates a major shift for the city that has often been involved in lawsuits with the Tohono O’odham Nation and has avoided discussions with the nation’s leaders. City leaders believe the casino operation would compete with Westgate and nearby businesses, drain sales tax revenue and increase demand for city services. The city council member majority of four consider the casino and resort as a potential boon for the city’s economy and have recently directed the city’s staff to begin negotiations with the nation. The U.S. House of Representatives has passed the bill and the measure now awaits consideration from the Senate Committee on Indian Affairs.

´ CiTy OF SCOTTSdAlE A vote on the City of Scottsdale General Plan, which was

planned for this November, has been postponed until 2015 or possibly even later. This decision comes after months of work by the city to develop a new plan, with much public input, after the previous effort was defeated by voters in 2012. The plan has been involved in controversy for two years amid concerns that it could fail again at the polls and negatively impact a possible Scottsdale Unified School

District override vote. In a letter from the school district, officials have asked the city to consider a new date for the general plan vote other than November when the district most likely will have an override on the ballet. The general plan outlines a path the city intends to take into the future to accommodate growth and is required to be updated every 10 years and also requires voter approval. These proposed plans are typically approved with little controversy, but critics opposed to the plan are saying the plan does not do enough to protect the city from unchecked development. In the past two years the voters have rejected the property tax that funds the override for the school district’s budget and if it is not renewed this fall it will expire. As such, the school district has requested a clear November ballot, free of any City of Scottsdale initiatives, moving the general plan to a different ballot, where it wouldn’t conflict with the override.

´ TOwN OF GilbErTEarlier this year Gilbert’s Town Council adopted most

of the provisions in the 2012 International Building Code, with the exception of the energy conservation and “green” construction regulations which were adopted but only as voluntary codes. A majority of the Valley’s municipalities had already adopted these new building standards months ago. However, unrest among opponents to the regulations who considered them an overextension of government power delayed and even threatened to defeat their approval for the Town of Gilbert.

´ CiTy OF MAriCOpA As in many other Valley municipalities, the City of

Maricopa is proposing to install an online portal for builders to electronically submit building plans to the city for review in an effort to initiate a more efficient and cost saving process. The system would accommodate plans for both small and large buildings and for new houses or just small improvement projects. City leaders indicate that the city would save in printing costs, travel costs and time taken to deliver and pick up plans and could potentially review more plans per person then they currently do. The initial cost of such a system is estimated to be less than $100,000 and it would take approximately 30 to 90 days to implement.

´ TOwN OF FlOrENCE In January 2013, the Florence Town Council approved

multiple text revisions to its downtown commercial (DC) zoning district. These allowed for hotels, bed and breakfast facilities, movie theaters and grocery stores as permitted uses; providing consistency in setback requirements for uses; and eliminating a majority of the on-site parking requirements. There has been much interest in the DC district, and these applications are being combined by the town for a single town application for rezoning to DC zoning. Because it is a town application, residents can file without a fee.

The P&Z column is compiled by Dave Coble and George Cannataro with Coe & Van Loo Consultants, cvlci.com

Planning and Zoning

11

BELOW: Left, Envy Condominiums; Top Right, The 17/Union Hills Business Center; Bottom Right, Grand Canyon University Arena

project Newsproject News ClEArEd FOr TAkEOFFAirport I-10, a Class-A industrial project near the Sky Harbor International Airport, broke ground in mid-March. The 600KSF project, developed by Wentworth Property Company/Clarion Partners and leased by JLL, is located on the NWC of 24th Street and Rio Salado Parkway. The spec development will accommodate users looking for space between 50KSF and 300KSF.

Old TOwN luxuryDeco Communities entered a joint venture with Isles Ranch Partners on Envy Condominiums in Scottsdale. The $37M project will be located in Old Town Scottsdale on 75th Street. Slated for completion in 2016, the 90-condo complex is designed with

Generation Y homebuyers in mind. It will have a “Grand Lobby,” 24-hour concierge, 4KSF fitness facility, rooftop pool, underground three-level parking. Units will range from 800SF to 1,750SF. Its interiors will be styled by Private Label International.

GrANd CApACiTyGrand Canyon University Arena’s seating is getting expanded from 4,300 to 7,000 seats. Tutor Perini Building Corp., which built the arena two and a half years ago, has taken on the expansion project with a 190-day deadline. Changes include a new upper desk, a hanging 11KSF structural steel mezzanine that will wrap around the arena, with another deck above it at the south end of the arena. There will also be more restrooms, exists and smoke evacuation

systems. The University’s has an expected enrollment of 10,500 students in fall 2014.

NEw SHOwrOOM iN TOwNThe 17/Union Hills Business Center, 113,880 SF industrial and showroom project in Phoenix broke ground in May. The multi-tenant project consists of 61,320 SF and 52,560 SF buildings featuring 24-foot clear height, dock and grade level loading, ESFR fire protection and fenced truck courts. The property is owned by Sun State Builders owner Jim Chamberlain. Balmer Architectural Group and Lee & Associates are the architect and broker, respectively. Greenwood & McKenzie, a California-based investment company, will purchase the finished project in November.

rEvvEd & rEAdyHarley-Davidson of Scottsdale plans to build a two-story 146KSF facility in Scottsdale by next spring. The facility will include a service department, underground storage, customer lounges, an events space and shaded parking. The dealership was designed by KG Architects.

HEAlTHy ExpANSiONBanner MD Anderson Cancer Center opened the second phase of its outpatient facility on April 1. The three-story addition included an additional clinic and infusion space, a separate hematology/stem cell transplant clinic and expanded radiation oncology space in the James M. Cox Center for Cancer Prevention and Integrative Oncology.

I N C O M M E R C I A L R E A L E S T A T E

8 PeoPle to Know 2013

ARCHITECTS & ENGINEERS- PTK

SmithGroupJJr455 N. 3rd St., #250, Phoenixsmithgroupjjr.com · 602-265-2200

Responsibilities: Sr. Vice President, Corporate Practice LeaderYears at Company: 33 Years in CRE: 33Accomplishments: Medici has been with SmithGroupJJR since 1980 and has remained active in managing several of its key projects including TGen, Arizona Biomedical Collaborative and Freeport McMoRan Center. He is active in the the community and serves as co-chairman of the Annual Cystic Fibrosis Stair Climb & Firefighter Challenge; a member of St. Joseph’s Hospital Foundation Board; a member of the Scottsdale Cultural Council & SMoCA Board and past president of ASU Council for Design Excellence. His leadership enables SmithGroupJJR to achieve success both regionally and nationally.

michael l.medici, aia

Senior Vice President, Corporate Practice Leader

coe & Van loo conSultantS4550 N. 12th St., Phoenixcvlci.com · 602-264-6831

Responsibilities: Business developmentYears at Company: 22 Years in CRE: 37Accomplishments: Olson has more than 36 years experience in building what others say isn’t possible — complex civil engineering for private developments, water resources, municipal improvement projects, airport planning and design, construction specifications and inspection. In addition, he has provided consultant services and design expertise for petrochemical and marine industries along the Texas Gulf Coast. He has participated in various aspects of numerous major projects with a combined size in excess of 75,000 acres.

leS F.olSonPresident

WeStlake reed leSkoSkyOne E. Camelback Rd., #690, Phoenixwrldesign.com · 601-212-0451

Responsibilities: Principal/Director, WRL Phoenix; Project DirectorYears at Company: 5 Years in CRE: 30Accomplishments: Olson is a leader in integrated A/E design and project delivery. She builds strong teams serving Arizona real estate through top management, and multiple roles. Her expertise in LEED sustainable design, project delivery, design build, and BIM places her at the forefront. She drives the success of WRL’s Arizona studio, guiding strategic development and expansion in the West. Her 30-year experience in project management spans new construction and renovation, a range of construction types and budgets, including large complex projects.

rebeccaolSon, aia,

leed apPrincipal, Director of Phoenix Studio

dlr Group6225 N. 24th St., #250, Phoenixdlrgroup.com · 602-381-8580

Responsibilities: Chairman of DLR GroupYears at Company: 41 Years in CRE: 41Accomplishments: Pearsall became Managing Principal at DLR Group in 1986 and received his Fellowship in the American Institute of Architects in 1987. He is chairman of the National AIA Large Firm Roundtable and on the Board of Regents of the National American Architectural Foundation.

brycepearSall, Faia

Chairman

phX architecture7507 E. McDonald Dr., #B, Scottsdalephxarch.com · 480-477-1111

Responsibilities: Lead Architect and Principal, business and project management Years at Company: 2 Years in CRE: 12Accomplishments: Peterson is licensed in several Western states, and is an active member in AIA Arizona. He serves as a board member for Valley Forward. He was voted Best Architect in AZ Foothills - Best of Our Valley, and has designed projects that have been featured in publications such as LUXE, Phoenix Home & Garden, Luxury Home Quarterly, AZ Foothills, and Mountain Living Magazines. Designing award winning projects, including clubhouses, custom residences, restaurants, and office, Peterson has led PHX Architecture to continued success.

erik b. peterSon aia

Principal

dWl architectS + plannerS, inc.2333 N. Central Ave., Phoenixdwlarchitects.com · 602-264-9731

Responsibilities: President of DWL, leading the Transportation Services Group.Years at Company: 24 Years in CRE: 32Accomplishments: Rao’s notable accomplishments include Phoenix Sky Harbor International Airport’s Terminal 4 and the West Terminal Expansion project at Phoenix-Mesa Gateway Airport. He has managed more than $700M worth of aviation work. He is actively involved in the Arizona Airports Association, Airport Consultants Council, Southwest Chapter of the American Association of Airport Executives, and currently sits on the Board of Directors for the Support Sky Harbor Coalition, Discovery Triangle and East Valley Aviation & Aerospace Alliance.

SteVerao, aia

President

PTK_6-11_PTK_2013_Architects & Engineers.indd 8 4/30/13 10:08 AM

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University of Arizona’s Health Sciences BuildingPhoenix, Arizona

FACTS & FIGURESOWNER: se debita nonecea quidero offi cte molent audam unt om-modit atquae voluptios SIZE: sit libus, ut in etur? Qui corectium quo quis aborepe ommo ipsa sedit, cores dolupiciis dolupta tisitatur?ARCHITECT: Everumet vit ma nes et quia sam dolectur si te volore volorer feribus, omnis rem. Ficiae non ea cullor similluptat volese THE NEED: quae cup-tati orunto od magnate doluptat quae por sum hillaut ad quae por sumTHE CHALLENGE: ut do-lutectur, sus moloraten-dem sequunt magnati quias moluptaspis veli-quo cullibus vent peditat entionem qui

SUPPORT TEAMCONTRACTORS: se debita nonecea quidero offi cte molent audam unt om-modit atquae voluptios sit libus, ut in etur? Qui corectium quo quis aborepe ommo ipsa sedit, cores dolupiciis dolupta tisitatur?

PeoPle to know is exPanding in 2014

PEOPLE TO KNOW

CATEGORIESArchitectsEngineersAttorneys

Brokers Developers

Finance AccountingGeneral ContractingProperty Managers

Subcontractors

PROJECTS TO KNOWCATEGORIESAdaptable Re-UseArt/Entertainment Office Development Industrial DevelopmentGovernmentHealthcare Facilities Hospitality Multi Family Retail/Mixed Used Development Tenant Improvement Educational Facilities

For more information call: 602.277.6045 or visit azBIGmedia.com

PEOPLE TO KNOW

PROJECTS TO KNOW

AZRE Magazine will combine the top People to Know with the top Projects to Know — all in one issue! This annual special edition will feature the best commercial real estate projects that define our state with the

people who make them happen.

PEOPLE TO KNOW will reveal updated interviews that add more personality

to the profiles than ever before.

PROJECTS TO KNOW acknowledges Arizona’s landmark developments in a range of categories and notable additions to cityscapes statewide.

+

Coming

november

Sample page/People to Know Sample page/Projects to Know

After hours

14 | May-June 2014

JANIS BLADINEPARTNER AT JENNINGS, HAUG & CUNNINGHAM LLP

YEARS AT COMPANY: 2 OFFICE: Central Avenue & Thomas Road, PhoenixEDUCATION: San Jose State University

PRIMARy REsPonsIBILITIEs: As an environmental lawyer, I work with private businesses & public entities across Arizona. They rely on me to help understand the myriad of environmental laws and regulations that apply to their business or projects and advise on what is necessary to comply. Environmental laws are often complex and confusing. I regularly help by translating these requirements into user-friendly, understandable language, offering clear definitions and answering their questions. Also, when clients are proactive I enjoy collaborating and discussing the potential impact that relevant environmental laws may have on their business in advance of decisions. This is the best way to ensure well-informed decisions are made prior to development.

In commercial real estate transactions, I help parties understand the implications of environmental due diligence reports and

provide assistance in negotiating various environmental protections for the buyer or seller.

FAVORITESsPoRTs TEAM // The Phoenix SunsMUsIc // Contemporary Christian is on my radio, but I like most kinds of music.TRAvEL DEsTInATIon // I’m looking forward to exploring some beautiful natural areas in Washington, such as hiking through Olympic National Park rainforest and then to also stay at the TreeHouse Point bed & breakfast in Fall City. LEIsURE AcTIvITIEs // I love spending time at home tending to my urban farm. Our home is in a neighborhood that was originally a citrus orchard with flood irrigation. We still have about a dozen grapefruit and orange trees. To that, we’ve added lemon, apple, nectarine, plum, apricot and pomegranate trees. We also have chickens roaming the backyard. They not only produce wonderful eggs, but they also eat many of our leftovers and trimmings. My husband and son built me two raised bed planters that house my herb garden and various vegetables. I find tending to my urban farm is quite relaxing and creates a beautiful home environment for my family.

WHAT DID yoU THInk yoU’D BE WHEn yoU GREW UP? I’ve wanted to be a lawyer since I was very young though my family cautioned I was “too nice” to be a lawyer. I’m proud of the trusted relationships I have with my clients, which they’ve explained is largely attributed to my approach and personality. They appreciate that spending time with their lawyer is pleasant, some have even said “enjoyable!”

oF WHAT PERsonAL oR PRoFEssIonAL AccoMPLIsHMEnT ARE yoU MosT PRoUD? While with the City of Tempe, I was proud of being a key part of a legal team that took a case to the Arizona Supreme Court where we prevailed in upholding the voters’ intent against a challenge to the law. It was very rewarding to work closely as a team and fighting for something about which I felt so passionately. Transitioning to environmental law was natural for me after this experience.

WHAT WoULD PEoPLE BE sURPRIsED To knoW ABoUT yoU? I’m a third generation Arizona native who raises chickens.

SHAVON ROSE/AZBIGMEDIA

KATHY FOSTERSENIOR VICE PRESIDENT, COLLIERS INTERNATIONALIN GREATER PHOENIX

In the mid-1980s, Kathy Foster moved to Arizona, where she now helps companies plan for their future. When Foster was younger, she thought she’s be a professional dancer or dance instructor and has always wanted to open a non-competitive dance studio for disabled children. Foster danced with a college troupe into her late 30s and most recently joined the board of Aid to Adoption of Special Kids (AASK), where she serves as the vice chair. Learn more about Foster, AASK, her best career advice and find out what she thinks people will find most surprising about her at azBIGmedia.com/azre-magazine.

MIKE MERTES/AZBIGMEDIA

Building Successful Arizona Projects for 27 Years

480.497.2300 • fax: 480.497.9610 • www.bjerkbuilders.comLicense B1-088897

ReputationA contractor’s reputation for excellence builds by completing projects on time, within budget, and by continually exceeding expectations.

Reputation-HalfPg-112213_Layout 1 11/22/13 2:13 PM Page 1

Circulation . . . . . . . . . . . . . . . 25,000Readership . . . . . . . . . . . . . . 122,500Pass-along Readership . . . . . . . . 4 .9

How Long ReadeRs KeeP tHeiR CoPies of aZRe

79% of readers utilize AZRE Magazineas their primary media source for information on all aspects of commercial real estate.

archive

> 1 Year

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55% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Male45% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FemaleAverage Age . . . . . . . . . . . . . . . . . . . . . . . . . . 45

titLe & Job Positions:37% . . . . . . . . . . Owners/Partners/Presidents13% . . . . . . . . . . . . . . . . . . . . . . .Vice President25% . . . . . . . . . . . . . . . . . Middle Management17% . . . . . . . . . . . . . . . . . . . . . Sales/Marketing5% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Brokers3% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other

eduCation:57% . . . . . . . . . . . . . . . . . Bachelor’s/Master’s/ . . . . . . . . . . . . . . . . Professional Degree/ PhD

about aZRe ReadeRs

For additional information,call 602.277.6045 or visit,azBIGmedia.com

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16 | May-June 2014

executive vOiceS

E-CommErCE oPENSrEtail ChaNNElS

it’s estimated that U.S. e-commerce sales will be $278B in 2014. By 2016, that spending will be $327B — a 62

percent increase in five years, according to Forrester, Inc. estimates. Yes, that’s a drop in the pool of the U.S. retail market (about 3 percent). However, it’s not one that brick-and-mortar retail brokers are ignoring. Local brokers weighed in on how Phoenix can and should adapt to the changing channels of retail real estate.

“People have a tendency to separate e-commerce from brick-and-mortar stores. The retailer of the future has to learn to adapt to do both,” says Velocity Retail Group Executive Vice President Darren Pitts. “The strong retailers of the future will continue to evolve with a multi-channel, often referred to as an omni-channel approach, that takes advantage of various sales mediums including mobile devices, the internet, catalog, as well as brick-and-mortar.”

De Rito Partners’ Brokerage President Stan Sanchez says e-commerce will

STAN SANCHEZPREsIDEnT, DE RITo PARTnERs

One of the most important trends to emerge in retail, along with e-commerce, is the growth of buying power from groups such as millennials and Hispanic consumers. These two groups are growing at a rapid rate and control an enormous (over $1 trillion in consumer spending) amount of purchasing power. The key for retailers is learning the purchasing habits of these groups and making adjustments to their purchasing characteristics. Many see millennials as a segment of society that is in-tune with technology. For retailers, the goal is to take advantage of integrating that technology into physical stores and to track their customer’s buying habits to help increase the bottom line.

DARREN PITTSExEcUTIvE vIcE PREsIDEnTvELocITy RETAIL GRoUP

Personalized offers or information provided to a shopper when they enter a store and sent directly to their mobile device. These offers are specific to the customer’s purchasing pattern and only for their use while they are in the store. Another trend is retailers who use their stores as fulfillment centers. As an example, if a customer wants a particular type of shirt but it is not in the store they are physically in, but in another, they can have it shipped directly to their home. The retailer controls their inventory better, and the customer gets what they want.

TYSON SWITZENBERGvIcE PREsIDEnT, JLL

Experiential retail. Retailers need to give shoppers a good reason to make an in-person visit to their stores—to go beyond a simple retail transaction that shoppers can do virtually anywhere. Customers are looking for an experience. Some retailers practicing this include: Apple Store: the “Genius Bar” offers hands-on troubleshooting, where customers can interact with friendly, trained experts in a unique, designated space; Flix Brewhouse: As America’s Cinema Brewery, this retailer combines the latest Hollywood productions, custom crafted beer and great food – all served “in theater” and a la carte basis so that the experience can be customized.

What’S aN imPortaNt trENd iN rEtail that PEoPlE Should bE WatChiNg?

affect the way business is conducted but not replace store-front appeal to some customer groups.

“Service-oriented businesses and daily needs stores will always have a role in commercial real estate, because those tenants can’t be replaced by online retailers,” he says. “While some may think that e-commerce threatens brick-and-mortar venues, the truth is it simply adds a new dynamic to the location, the

size, and the type of real estate these businesses are looking for.”

E-commerce is shifting many retailers into smaller stores and creating more flexible shopping centers, says JLL Vice President of Retail Tyson Switzenberg.

“While e-commerce and technological innovations threaten certain retail models like bookstores or video stores, it’s not the whole story and does not represent all retailers,"adds Switzenberg.

The defi nitive resource for hard-hitting news about commercial real estate in Arizona.

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The defi nitive resource for hard-hitting news about commercial real estate in Arizona.

Print | Digital | Online

In print or on-line at azbigmedia.com/azre

Sign up for the AZRE weekly newsletter

delivered directly to your inbox.

18 | May-June 2014

Ryan Schubert Mike BeallMarty De Rito Sean Spellman

Luke Walker

Dave Carder

Chris WalkerMichael Hackett Jeff Wentworth

RETAIL/sALEs

1. conTInUUM BUsInEss& TEcHnoLoGy PARk, cHAnDLER463,658 SF; $51.75MBUyER: Southwest Value Partners Enterprise, LLCSELLER: Capital Commercial Investments, Inc.LISTING BROKERS: Jeff Wentworth, Mike Beall, Sean Spellman,Chris Walker, Cassidy Turley, Luke Walker, Dave Carder, CBRE

2. MEsA coRPoRATE cEnTER I, MEsA106,077 SF; $13.2MBUyER: Buchanan Street PartnersSELLER: Parkway Properties, Inc.LISTING BROKERAGE: Cushman & Wakefield, Inc.

3. ARRoWHEAD MEDIcAL PLAZA II, GLEnDALE45,289 SF; $11.17MBUyER: American Realty Capital Healthcare Trust, Inc.SELLER: LaSalle Investment Management

4. onE AGAvE cEnTER, PHAsE I, TEMPE76,795 SF; $9.8MBUyER: Tryperion PartnersSELLER: IPRO Tech, Inc.LISTING BROKERAGE: Cassidy Turley

5. ELEMEnT AT kIERLAnD, scoTTsDALE55,268 SF; $8.2MBUyER: Montana Avenue Capital LLCSELLER: Nova ManagementLISTING BROKERAGE: CBRE

oFFIcE/sALEs

1. sHEA scoTTsDALE cEnTER, scoTTsDALE160,228 SF; $44.5MBUyER: J Simms Enterprises LLCSELLER: Karlin Scottsdale SheaLISTING BROKER: Michael Hackett, Ryan Schubert, Cassidy TurleyBUyER BROKERAGE: Marty De Rito, De Rito Partners

2. PALM GLEn sHoPPInG cEnTER. GLEnDALE175,686 SF; $14.35MBUyER: Alan ArakiSELLER: Palm Glen Shopping InvestorsLISTING BROKERAGE: Cassidy Turley

3. THE sHoPs AT TATUM PLAZA sHoPPInG cEnTER, cAvE cREEk96,802 SF; $8MBUyER: Westwood Financial CorpSELLER: Park West InvestorsLISTING BROKERAGE: Cassidy Turley

4. 6838 n. 7TH sT., PHoEnIx14,490 SF; $7.9MBUyER: James R. DahlSELLER: Becovic Management Group, Inc.LISTING BROKERAGE: Marcus & Millichap

5. 711 E. InDIAn scHooL RD., PHoEnIx12,900 SF; $7,297,250BUyER: American Realty CapitalSELLER: Fortress Investment Group, LCC

TOP 5 NOTABLE LEASES AND SALES(FEB. 1 TO MARCH 31, 2014)SOURCE: CASSIDy TURLEy RESEARCH DEPARTMENT, COLLIERS INTERNATIONAL AND COSTAR

There’s no such thing as a “small” deal in this industry, coming out of a recession. However, it’s the big deals, and the brokers who make them, that make the market an interesting one to watch.

In every issue, AZRE publishes the top five notable sales and leases for a period of 60 days (one month out from publication) based on research compiled by Cassidy Turley and Colliers International with Costar.

1. RIvERsIDE DIsTRIBUTIon cEnTER, PHoEnIx250,796 SF; $250,796BUyER: Exeter Property GroupSELLER: PrologisLISTING BROKERS: Andy Markham, Mike Haenel, Will Strong, Cassidy Turley

2. 21415 n. 15TH Ln., PHAsE I, BLDG. E, PHoEnIx 135,602KSF; $12,394,968BUyER: Meritex Enterprises Inc.SELLER: Carlson Real Estate Services

3. 6525 E. THoMAs RD., scoTTsDALE117,869 SF; $8.5MBUyER: Meritage Homes of Arizona, Inc.SELLER: Paramount Leisure Industries Inc.LISTING BROKERAGE: Nathan & Associates, Inc.

4. sPEcTRUM RIDGE, PHoEnIx68,891 SF; $8,045,500BUyER: Hopewell Development CorporationSELLER: Turner Development CorproationLISTING BROKERAGE: Cassidy Turley

5. UnIvERsAL TEcHnIcAL InsTITUTE, PHoEnIx58,120 SF; $6.3MBUyER: Hyperion Fund LPSELLER: Hazelwood Enterprises Inc.LISTING BROKERAGE: Cutler Commercial

InDUsTRIAL/sALEs MULTI-FAMILy/sALEs

1. ALTA RAvEnWooD, TEMPE240 units; $44.45MBUyER: The Hudye GroupSELLER: Boston Capital Real Estate Partners, LLCLISTING BROKERS: Tyler Anderson, Sean Cunningham, Asher Gunter, Matt Pesch, CBRE

2. vUE PARk WEsT, PEoRIA260 units; $30.05MBUyER: Baron PropertiesSELLER: Wood PartnersLISTING BROKERAGE: Marcus & Millichap

3. cHAZAL scoTTsDALE188 units; $23MBUyER: ColRichSELLER: Public Employees, Retirement System of NevadaLISTING BROKERAGE: CBRE

4. cARLETon cLUB, PHoEnIx436 units; $22.242MBUyER: Synergy Properties LTDSELLER: General Electric Credit Equities Inc.LISTING BROKERAGE: Colliers International

5. TIMBERLInE PLAcE, FLAGsTAFF102 units; $11.825MBUyER: Clear Sky CapitalSELLER: ViaWest PropertiesLISTING BROKERAGE: Cassidy Turley

Mike Haenel Sean CunninghamWill Strong Asher Gunter Matt PeschAndy Markham Tyler Anderson

19

1. DIABLo TEcHnoLoGy cEnTER, TEMPE109,348 SFLANDLORD: Walton Street CapitalTENTANT: Special Loan ServicingLANDLORD BROKERS: Charles Miscio, ColliersTENANT BROKER: Dan Dobric, Newmark Grubb Knight Frank

2. AsU REsEARcH PARk, TEMPE96,649 SFLANDLORD: RyanTENTANT: AmkorLANDLORD BROKERAGE: Cassidy TurleyTENANT BROKERAGE: CBRE

3. PIMA oFFIcE PAvILIon, scoTTsDALE90K SFLANDLORD: Healthcare Realty TrustTENTANT: Rural MetroLANDLORD BROKERAGE: TranswesternTENANT BROKERAGE: CBRE

4. RIvERsIDE oFFIcE PLAZA, TEMPE17K SFLANDLORD: Secure MedicalTENTANT: DHLLANDLORD BROKERAGE: Commercial Properties Inc.TENANT BROKERAGE: Cushman & Wakefield

5. 1410 W. 10TH PL., TEMPE15,215 SFLANDLORD: Aries Technology, Inc.TENTANT: Banner HealthLANDLORD BROKERAGE: Cassidy TurleyTENANT BROKERAGE: JLL

oFFIcE/LEAsEs

Dan Dobric Charles MiscioMike Allen Matt Rinzler

20 | May-June 2014

LAnD/sALEs

1. sE cHAnDLER BoULEvARD & Los FELIZ DRIvE, cHAnDLER7.09 acres; $7.878MBUyER: HCW Development Co.SELLER: Statemans Group of CompaniesLISTING BROKERAGE: Mike Allen, Matt Rinzler, Insight Land & Investments

2. nW PEcos RoAD & 31sT AvEnUE, PHoEnIx158 acres; $7.6MBUyER: Taylor Morrison/Arizona, Inc.SELLER: Bixby Bridge Capital

3. s 109TH AvEnUE & W GRAnT sTREET, AvonDALE140 acres; $7.5MBUyER: Raintree Investment Corp.SELLER: Desert Troon Companies, Inc

4. vERRADo vIcToRy DIsTRIcT, PHAsE I, BUckEyE17.99 acres; $7.05MBUyER: Lennar CorporationSELLER: DMB & Associates, Inc.LISTING BROKERAGE: Nathan & Associates, Inc.

5. 30436 n. sIERRA vIsTA DR., QUEEn cREEk118 acres; $6,517,771BUyER: Ehlh-Kemf Sherwood LLCSELLER: Dwayne Sherwood PSP

21

1. 3941 W. MoHAvE sT., PHoEnIx144KSFLANDLORD: Homaz LPTENTANT: Mega FurnitureLANDLORD BROKER: Payson and Don MacWilliam, ColliersTENANT BROKERAGE: Mark Krison, CBRE

2. TEMPE coMMERcE PARk, TEMPE85,245 SFLANDLORD: Walton Street CapitalTENTANT: Consumer CellularLANDLORD BROKERAGE: Lee & AssociatesTENANT BROKERAGE: Capacity Commercial Group

3. FREEPoRT cEnTER, PHoEnIx63,840 SFLANDLORD: Overton Moore PropertiesTENTANT: CFA CabinetryLANDLORD BROKERAGE: Lee & AssociatesTENANT BROKERAGE: Cushman & Wakefield

4. cARvER DIsTRIBUTIon cEnTER, TEMPE45,228 SFLANDLORD: Principal Financial GroupTENTANT: Pet ClubLANDLORD BROKERAGE: Cassidy TurleyTENANT BROKERAGE: GPS Retail Advisors

5. 7TH sTREET BUsInEss PARk, PHoEnIx36,540 SFLANDLORD: EastGroup PropertiesTENTANT: Creative Touch InteriorsLANDLORD BROKERAGE: Cushman & WakefieldTENANT BROKERAGE: CBRE

1. MonTEREy vIsTA vILLAGE, cHAnDLER29,280 SFLANDLORD: Keith-Pecos, LLCTENTANT: Xtreme Air Jump 'N SkateLANDLORD BROKERAGE: Chris Campbell, Chris Hollenbeck, Cassidy TurleyTENANT BROKERAGE: Rachelle Strole, Capital Asset Management

2. DEsERT PALMs PoWER cEnTER22,613 SFLANDLORD: JRW InvestmentsTENANT: Jeg-Fit 75th Thomas LLCLANDLORD BROKERAGE: NAI HorizonTENANT BROKERAGE: NAI Horizon

3. vILLAGE cEnTER, PHoEnIx11,704 SFLANDLORD: Phillips Edison & CompanyTENANT: CrossFit MagnaLANDLORD BROKERAGE: Phillips Edison & CompanyTENANT BROKERAGE: Rein & Grossoehme

4. scoTTsDALE FAsHIon sQUARE, scoTTsDALE9,825 SFLANDLORD: The Macerich CompanyTENANT: Boss Hugo BossLANDLORD BROKERAGE: The Macerich CompanyTENAT BROKERAGE: The Macerich Company

5. scoTTsDALE PRoMEnADE9,787 SFLANDLORD: younan PropertiesTENANT: Cassidy TurleyLANDLORD BROKERAGE: Realty Executives

InDUsTRIAL/LEAsEs RETAIL/LEAsEs

Chris Campbell Chris Hollenbeck

Payson MacWilliam

Rachelle Strole

Mark KrisonDon MacWilliam

united States healthcare is on the brink of change.

Soaring costs, advanced technology, a sudden influx of newly insured patients delivered by the Affordable Care Act, and, especially, new thinking about the optimum way to provide the best healthcare, make up the critical mass to power the transformation.

As the delivery model evolves, so will the real estate – the structures that house healthcare services.

Hospitals and medical office buildings, doctors’ offices, labs and rehabs, emergency rooms and surgical suites, clinics and telemedicine call centers

will eventually change or rearrange to accommodate the new framework.

In fact, those who say the physical structure changes influenced by the ACA will be minimal, rely on the fact that forward-thinking healthcare providers have already been focusing on the emerging trends.

Banner Health, Arizona’s largest healthcare provider, was moving toward a “keeping people healthy” focus rather than just treating sick patients long before the ACA arrived to accelerate the process.

“The ACA is only a piece of the picture,” says Kip Edwards, Banner Health’s vice president of development

and construction. “The bigger piece is where healthcare needs to go – toward population health management.”

That means emphasizing preventive and primary care, and making it easy, accessible and affordable, he says. To accomplish that, we need to place primary care physicians and specialists, imaging, labs and wellness services in neighborhoods — and sometimes even at the other end of a phone or computer screen.

To that end, Banner is developing community-based “health centers,” that are multi-specialty clinics ranging in size from 20KSF to 100KSF, with space for as many as a dozen doctors, diagnostic

22 | May-June 2014

HEALTHCARE

healthcare REALESTATE in transition:ARIZONA READIES FOR THE REVOLUTION By DONNA HOGAN

Phoenix Children's Hospital has joined the Arizona Care Network, an

expanding integrated system intended to provide collaborative patient care.

Above: PCH in Avondale, Ariz.

23

testing capabilities and extended hours.So far, Banner has opened eight in

Maricopa County and more are needed, Edwards says.

Dr. William Ellert, Abrazo Health System’s Chief Medical Officer, also identifies the ideal healthcare delivery model as community-centered.

Abrazo, Arizona’s second largest healthcare provider and parent of six Arizona Hospitals, school-based health centers and a health group plan with 19 clinics, opened the state’s first stand-alone emergency department in Peoria in 2010, and located a second one in Buckeye a year later.

Abrazo has now teamed up with Dignity Health to form the Arizona Care Network — more than 2,000 physicians linked in an integrated system to provide collaborative patient care. Dignity Health is parent to St. Joseph’s Medical Center, which includes Barrow Neurological Institute, as well as Chandler Regional Medical Center and Mercy Gilbert Medical Center. Phoenix Children’s Hospital also joined the expanding network.

The consolidation and collaboration of healthcare services — and providers — is driven by clinically sound principles, Ellert says, but cost effectiveness is the bonus by-product.

Most importantly, it’s the optimal path toward improving overall health outcomes.

“The United States is 37th in the world in outcomes,” he says. “It’s not a pretty picture.”

That’s because traditional U.S. healthcare systems focused on treating sick people instead of trying to keep them from getting sick.

cHANGING FocUsBut the changing focus and the provider

collaborations will need more and differently designed facilities.

And the big obstacle, Edwards and Ellert say, toward developing the ideal healthcare network – and the appropriate real estate

West Valley Hospital’s new trauma center houses a

32-bed inpatient care unit, two additional surgical suites

and two new trauma bays.

24 | May-June 2014

HEALTHCARE

to service it — is an antiquated “fee for services” remuneration system.

“Transition is not easy,” Ellert says. “If you have a lot of hospital beds, the desire is to keep them full. But we want to just have the right people in hospitals. We don’t want to be paid for heads in beds, we want to be paid for outcomes, to be rewarded for keeping people healthy.”

That, Edwards says, means getting paid to take on the overall healthcare for a population of patients, and not getting paid for the number of MRIs performed or the number of office visits or in-hospital days logged.

Banner and Abrazo see the ideal healthcare delivery system as focused on total patient care, with wellness as the prime goal, and primary care physicians as the key drivers.

Arizona’s healthcare giants also agree that the new delivery system will eventually need a new real estate structure to align with the new goals.

Eventually is the key word.While the experts look forward to

more medically effective — and more cost effective — systems and structures, theories about what those facilities will look like, what they will house, and where they need to locate varies.

Arizona, possibly because of that

uncertain outlook, is foot-dragging, says Greg Vidor, president and CEO of the Arizona Hospital and Healthcare Association, the largest and most influential advocacy group representing the state’s healthcare providers and their patients.

“Organizations are looking at what’s

coming and where it’s headed,” Vigdor says. “But the picture is muddled.

“The status quo isn’t really an option, but which way to go? The dominant theme has been merge, affiliate, partner. That is, ‘If we all get bigger, it will get better.’”

But for the developers, owners, managers and investors in the MOBs preparing for the evolving delivery systems, it’s like a giant guessing game. It’s an expensive proposition if they guess wrong.

“Arizona has come out of the recession slower, and we as a state have not reacted as quickly to ACA implications as other states have,” says Healthcare Trust of America CEO Scott D. Peters.

The Scottsdale-based REIT has invested more than $3B in healthcare real estate, with a current portfolio of more than 14 MSF in 27 states, 1.4 MSF of that in Arizona.

HTA “likes Arizona as an investment,” Peters says, and his company is ready to react when the state legislators and the state’s physicians and providers sort out their direction and timing.

Ensemble Real Estate Solutions CEO and managing director Bill Molloy, agrees.

Phoenix-based Ensemble manages, leases and develops medical office buildings in three states with a current portfolio of 169 properties totaling 8 MSF.

Among the national system changes both

“From a real estate perspective,

under the new delivery system, the

hospitals will be locating outpatient facilities in outlying

areas, close to where people live

and work.”Donna Jarmusz,senior vice president for

Strategic healthcare Initiativesfor Alter+Care

Banner Health Center

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26 | May-June 2014

HEALTHCARE

Peters and Molloy note is the integration of healthcare providers to create cost efficiencies and eliminate redundancies — for example, physicians clustering into large groups to share overhead and clout, and hospitals hiring physicians or affiliating with the big physicians’ groups.

That’s the “merge” trend described by Vigdor and evidenced by the Arizona Care Network link-up of Abrazo, Dignity and PCH.

“We travel across the country to compare notes,” Molloy says. “Five years ago, all the hospitals were talking about acquiring doctors. We thought, ‘That’s not happening here.’ We do seem to have a pioneer mentality, and that’s probably why we are resistant. But the train has left the station, and this is the healthcare future. We are doing it now, but somewhat reluctantly.”

Kate Morris, CBRE Healthcare Services Group's first vice president, agrees that a wait-and-see attitude has partially paralyzed those who build, renovate or invest in Arizona’s healthcare buildings of the future.

The good news, she says, is that the local real estate market is finally starting to react.

“There’s been a lot of new activity in the last six months,” she says.

And what is the MOB concept du jour designated to handle the system transformation?

The single-doctor suites will “go away,” Morris says, and the new MOB model will be a bigger building with larger suites

for the physician groups and expansive quarters for medical services such as labs and imaging centers.

Many of the older MOBs can be “repurposed” to fit the needs of the changing system, says Morris’ colleague Vince Femiano, while new ones will be built to suit the new format.

“It’s exciting,” Femiano says. “There is a new opportunity to build 30KSF to 50KSF MOBs in secondary markets, and as for

the older MOBs, investors want to bring them up to new standards.”

Among the major factors accelerating the process, now that the ACA is a done deal, is anticipation of a big spike in the number of people insured — a whopping 32 million people nationwide, about 900,000 of them in Arizona, says Chelsea Maddox, director for the Cushman & Wakefield’s Phoenix-based Healthcare Practice Group.

“There are millions who didn’t have access before, and who will now be able to see a physician,” she says. “First and foremost, there will be an increase in the need for space based on the increase in volume. The efficiency of space is becoming extremely important.”

Maddox expects new MOBs to pop up in currently under-served neighborhoods, stretching deep into the communities rather than on or near hospitals, even though the physicians and services may be part of -- or affiliated with — the major hospital systems.

She defines the new framework as a “hub and spoke system,” with the primary care facilities treating outpatient needs within the communities and pushing those who need inpatient care to the parent hospitals.

Peters, however, expects those new and newly remodeled MOBs to cluster on or around hospital campuses, where doctors and their patients can find the supporting services they need for cost-effective care.

Dr. William Ellert Vince Femiano Chris Jacobson Donna Jarmusz

Chelsea Maddox Bill Molloy Kate Morris Scott Peters Greg Vigdor

“First and foremost, there

will be an increase in the need for

space based on the increase in volume. The efficiency of

space is becoming extremely important.”

Chelsea Maddox,Director for the Cushman & Wakefield’s Phoenix-basedHealthcare Practice Group

HEALTHCARE

He defines the on-campus MOBs as “core critical,” although he says HTA has some successful outlying properties in other states, and he is eyeing some northeast Phoenix land as attractive for possible future development.

Edwards of Banner Health says both on- and off-campus MOBs will be essential for a cost-effective system.

“Cardiologists and surgeons will need to be close to the hospitals where the bulk of their care happens,” Edwards says. “But primary care physicians, specialists and imaging labs will be needed in the communities.”

Regardless of where they think the MOBs of the future will be located, all the experts agree there is a growing need for bigger and differently configured facilities to house the bigger physician groups and more outpatient services.

“There is so much pent-up demand for new, efficient space,” Maddox says. “There’s a lot of buzz about new development.”

As for the existing MOBs, many are in the right places now and can be easily converted to handle the larger doctor groups and the added services, says Donna Jarmusz, senior vice president for Strategic

Healthcare Initiatives for Alter+Care.“From a real estate perspective, under

the new delivery system, the hospitals will be locating outpatient facilities in outlying areas, close to where people live and work,” Jarmusz says. So even

if formerly entrepreneurial doctors practicing in smaller suites in smaller buildings join a hospital network or physician group, they may get to stay in place — at least for the short term — if that place is geographically desirable.

eNoUGH BeDsAs for the hospitals, with the shift from

inpatient to outpatient care, most of the experts agree that Arizona has enough beds for now.

“My opinion is we are at about the right number, because the population insured is increasing but the need per person is decreasing,” says Edwards.

Still, Banner just built a new patient tower at Estrella because some of the beds, like some of the MOBs, are not necessarily in the right place for the population growth.

But even that new development was designed to include the most cost-effective use of resources from building materials to technology, said Chris Jacobson, vice president for healthcare pre-construction at McCarthy Building Companies.

“ACA is not driving change as much as is the rising cost of healthcare,” he says.

28 | May-June 2014

Banner Health Center in Verrado

“We do seem to have a pioneer

mentality, and that’s probably why we are resistant. But the train has left

the station, and this is the healthcare

future.”Bill Molloy,

CEO and managing directorEnsemble Real Estate Solutions

29

HEALTHCARE

30 | May-June 2014

Jacobson sees a much greater demand for his future services in retrofitting hospitals for new technology, improved infrastructure and more cost-efficient operations than for building new.

For at least the next few years, new healthcare construction in Arizona will be concentrated on outpatient facilities, he says.

So, if all the experts agree that there is a growing need for more and different ambulatory care facilities, when can we expect to see this burgeoning bubble of new building to begin?

“The time has come,” Jarmusz says. Several East Coast communities have

jumped feet first into the muddied pool, she says.

They have employed various approaches to the new focus on wellness and cost efficiency from providing virtual healthcare through telemedicine techniques to renovating doctors’ offices as time-shares to building health facilities in retail centers.

But, like Arizona, most states are testing the waters and tweaking the system – and real estate development plans – at a cautious pace, she says.

Jarmusz sees the radical makeover unfolding nationwide within a five- to 10-year time frame.

In fact, Arizona is not as far from the front lines as some may believe, thanks to forward-thinking local healthcare leaders.

Long-term, Jarmusz foresees all the older, smaller MOBs ultimately being replaced by the healthcare villages – the new concept that Banner Health has already been developing in Arizona.

And she describes the emergence of “free-standing ERs with no beds,” developed by some East Coast-based healthcare trendsetters, as “revolutionizing” the industry.

By that definition, Abrazo would qualify as among the generals leading the charge.

Arizona’s healthcare providers have the foresight, and they would like to

move even faster towards the ideal, they say, but they remain encumbered by the outmoded cost-system and an outdated physical structure.

Ellert of Abrazo, says morphing to the ideal system “without bankrupting everybody” is “dangerous territory.”

“That’s the balancing act,” he says. “We still have a fee for service (payment structure), and we want to keep our healthcare systems healthy while we are in transition. We’re going to struggle for a while.”

Edwards of Banner agrees.“The most perplexing question is

how to transition,” he says. “We have to function in today’s system or we won’t have the money to get there.”

The good news for Arizona is its desirability as a destination.

“The advantage is our population is growing,” Ellert says. “In terms of real estate, since we are growing, we can build the new models because we are having to build anyway.”

West Valley Hospital in Goodyear

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32 | May-June 2014

U.S. Green BUildinG CoUnCil

leedinG the way:MEET ARIZONA’S TOP SCORING COMMERCIAL BUILDINGS By SARA PARKER

LeeD New coNstrUctIoN:THE villAGE — prESCOTT COllEGE CAMpuS HOuSiNG309 N. Willow St., PrescottplATiNuM: 92/110CErTiFiEd: June 2013dEvElOpEr: Prescott CollegeGENErAl CONTrACTOr: Haley Construction, Inc.ArCHiTECT: Weddle-Gilmore Architects

ASu HEAlTH SErviCES451 E. University Dr., TempeplATiNuM: 83/110CErTiFiEd: Feb. 2014OwNEr: Arizona State UniversityGENErAl CONTrACTOr: Okland ConstructionArCHiTECTS: Orcutt | Winslow, Lake | Flato

t he U.S. Green Building Council (USGBC) was established in 1994 as a 501(c)(3) nonprofit organization committed to sustainability through cost-efficient and energy-saving

green buildings. The USGBC maintains its mission through its Leadership in Energy and Environmental Design (LEED) green building certification program. In 2001, Arizona joined

the USGBC as its third chapter (USGBC now has more than 80 chapters). LEED has four different levels of certification based upon a point system: Certified (40 to 49 points), Silver (50 to 59 points), Gold (60 to 79 points) and Platinum (80+ points).

Many of the Arizona Gold and Platinum Certified buildings contained similar elements in order to earn the LEED certification. Some similarities include diversion of construction waste from landfills, use of indigenous landscaping and plants that can survive in drought conditions, use of drip irrigation systems, use of natural lighting through windows and skylights, implementation of window shades that control natural light, implementation of solar panels, use of low-flow fixtures that conserve water, implementation of rainwater harvesting cisterns, use of Energy Star Certified appliances, orientation of the building to face north or south, access to public transportation and bike or walking paths.

Below are the top-scoring buildings in Arizona certified between May 2013 and May 2014.

33

ASu wEST CAMpuS diNiNG HAll4701 W. Thunderbird Rd., GlendaleGOld: 75/110CErTiFiEd: July 2013dEvElOpEr: American Campus CommunitiesGENErAl CONTrACTOr: hardison/downey constructionArCHiTECTS: Hanbury Evans Wright Vlattas + Company

GilbErT FirE STATiON NO. 101280 W. Guadalupe Rd., GilbertGOld: 75/110CErTiFiEd: Nov. 2013dEvElOpEr: Town of GilbertGENErAl CONTrACTOr: ArCHiTECT: HDA Architects

ASu pOlyTECHNiC CAMpuS rECrEATiON7001 E. Williams Field Rd., MesaGOld: 74/110CErTiFiEd: Feb. 2014OwNEr: Arizona State UniversityGENErAl CONTrACTOr: Gilbane Construction Co.ArCHiTECTS: Architekton + 360 Architecture

brOwNiNG-MillEr rEAdiNESS CENTErFlorence Military Reservation, FlorenceGOld: 73/110CErTiFiEd: March 2014dEvElOpEr: Arizona Department of Emergency & Military AffairsGENErAl CONTrACTOr: Haydon Building Corp.ArCHiTECT: Burns & McDonnell

34 | May-June 2014

U.S. Green BUildinG CoUnCil

buCkEyE vAllEy FirE STATiON NO. 32619937 W. Arlington Rd., BuckeyeGOld: 72/110CErTiFiEd: Aug. 2013dEvElOpEr: The City of BuckeyeGENErAl CONTrACTOr: Core ConstructionArCHiTECT: Perlman Architects of Arizona

MAriCOpA COuNTy dOwNTOwN COurT TOwEr175 W. Madison, PhoenixGOld: 69/110CErTiFiEd: SEpT. 2013dEvElOpEr: Maricopa CountyGENErAl CONTrACTOr: Gilbane Construction Co.Architects: Gould Evans + AECOM

LeeD commercIAL INterIors:AdElANTE HEAlTHCArE MESA iNTEriOrS1705 W. Main St., MesaplATiNuM: 80/110CErTiFiEd: May 2013dEvElOpEr: Adelante HealthcareGENErAl CONTrACTOr: LGE Design BuildArCHiTECT: Cawley Architects

LeeD exIstING BUILDING:24TH AT CAMElbACk ii2325 E. Camelback Rd., PhoenixplATiNuM: 82/110CErTiFiEd: Oct. 2013OwNEr: Hines

35

Debates over energy consumption, reduction and alternatives occur frequently in the increasingly “green” world. Arizona stands as a leader in the alternative

energy market with the use of solar, geothermal energy and natural gas as alternatives to more traditional energy providers. Even through the decline of green building projects, as reported by Forbes, major companies and builders such as APS, SRP and Adolfson & Peterson (A&P) have completed large alternative energy projects in the last year.

Arizona Public Service, through the APS AZ Sun Program, and McCarthy Building Companies completed its third solar project, a large solar installation called the Hyder II in Yuma County last year. It uses more than 71,000 single-axis tracking photovoltaic panels to generate 14 megawatts of solar energy, which is enough to serve 3,500 Arizona homes. The project set a record year for APS with 410 megawatts of solar power and represented the largest annual increase in solar capacity, nearly tripling the total from 2012. APS contains more than 750 megawatts of solar capacity on its system after investing nearly $1B in solar projects, and serves more than 185,000 Arizona homes. Another large solar project built last year is the Fry’s Marketplace PowerParasol, which shades 74,800 SF, including 220 parking spaces, driveways, aisles, grocery cart stations and sidewalks. It diminishes the heat-island effect, enables light passage to allow the growth of plants and generates 1,013,140 kilowatt hours of solar energy.

Geothermal energy is another popular source of renewable energy in Arizona. Both SRP and A&P developed geothermal projects in 2013. Geothermal energy produces electricity from naturally occurring geothermal fluid, and steam forms when production wells access superheated water reservoirs thousands of feet beneath the Earth’s surface. As opposed to wind and solar that are affected by the weather, geothermal is a more reliable source of renewable energy. SRP purchased 50 megawatts of geothermal energy from CalEnergy. The project will annually offset 460 million pounds of carbon dioxide

emissions, the equivalent of 40,000 cars. SRP also has an agreement to purchase geothermal energy from the Hudson Ranch facility in California and Utah's Cove Fort plant.

A&P's latest geothermal project is Lookout Mountain Elementary School where it constructed a closed-loop system that allows the ground’s heat to warm the building during the winter and reverse the process in the summer by transferring heat back into the ground. The system does not use any chemicals, untreated water or Freon. A&P expect it to last up to 30 years and the underground wells to last up to 75 years.

The classrooms’ energy consumption will be reduced by 40 percent and the low maintenance and operations costs will save the school district up to $1.8M over the next 20 years.

Although there are many green projects occurring, there is a decline in contracts. Bryan Dunn, senior vice president of A&P, states that “the disconnect between the demand and not seeing as many ‘green contracts’ is that there are more and more building owners viewing a formal certification process as expensive and lengthy. Tight budgets don’t allow for the

upfront costs associated with a formal green certification. Instead, they are looking to incorporate the energy saving and durability aspects of green building into their projects without a formal certification of the building.”

Dunn also says solar technology may be played out. He is seeing trends with technology, such as waste-to-energy, bio-mass and bio-gas and geothermal energy. “Clients are considering several types of alternative technologies on single projects...Utilizing multiple solutions also keeps overall and total project costs down, benefitting everyone in the long run,” he adds.

Besides the cost of green projects, Scott Canada from McCarthy explains that projects may be slowing because of supply and demand. “There may be a near-term slowing of new projects while Arizona’s energy consumption begins to grow again, with the improving economy. Energy, including renewables, often cycles between a period of expansion and pause,” he says, adding that solar costs are continuing to drop, making it an attractive energy source, especially with the abundance of sunshine in Arizona. In its latest forecast, APS predicts renewable energy, gas in particular, will double in Arizona by 2029.

GREEN DEVELOPMENT STAyS sUNNy sIDe Up

By SARA PARKER

APS Hyder II Solar Power Plant – located in Hyder, Ariz.

APS PredictS renewAble energy, gAS in PArticulAr, will double in ArizonA by 2029.

ecoNomIc DeveLoper oF tHe yeAr:William JabJiniak, Economic DEvElopmEnt DirEctor, city of mEsa

As Economic Development Director at the City of Mesa, Bill Jabjiniak leads a team of 14 professionals focused on business attraction, retention and expansion, workforce development and revitalization. He has focused on the City of Mesa’s Healthcare, Education, Aerospace/Aviation and Technology/Tourism (HEAT) program in order to attract businesses and create quality jobs in Mesa.

In the past seven years, the Office of Economic Development (OED) attracted, expanded or assisted in 134 projects. In the last two years, the OED created and retained more than 3,600 jobs and generated nearly $2B of capital investment in Mesa.

The largest economic development was the attraction of Apple, Inc. This will be one of the first U.S. manufacturing facilities for Apple, which will result in 700 full-time jobs,

1,300 construction jobs and $1.5B in new capital investment for Mesa. Some other technology developments include Able Engineering, Bridgestone Corporation, Matheson Tri-Gas, Arizona Laboratories for Security and Defense and Launchpoint. These other companies will result in hundreds of jobs with average salaries above $50,000 and millions of dollars invested.

For education, Mesa attracted five new higher education institutions that created 44 new full-time jobs and contributed more than $6.5M in private investment to the city.

For tourism, Mesa houses two spring training baseball teams with new and updated stadiums. The Cubs Stadium Complex is estimated to bring $138M annually to Arizona. Mesa announced a 20-year agreement with the Oakland Athletics at a

Every year, the Arizona Association of Economic Development fields nominations for individuals and organizations that have a significant impact on a city, a community and the state. These Economic Development Distinguished by Excellence (EDDE)

awards are a tough-earn and a new year doesn’t always guarantee a winner; the “Best of Arizona” has only been awarded six times

in the last two decades. This year’s awardees were recognized at AAED’s Spring Conference in Tucson, Ariz. on May 2.

EDDE AwArDsBy SARA PARKER

$28M newly renovated Hohokam Stadium.Jabjiniak holds a master’s degree in Community Economic

Development and a MBA from Southern New Hampshire University, works with the Economic Development Advisory Board, city management and City Council to protect areas that offer significant potential for economic growth as employment centers. He also leads as a voice of the region on policy issues and regional collaboration as a member of several local, regional and national boards. He participates in more than a dozen forums on economic development including AAED, Urban Land Institute, Valley Partnership, CoreNet and IEDC.

ecoNomIc DeveLoper oF tHe yeAr,smALL commUNIty:mignonnE Hollis, ExEcutivE DirEctor, siErra vista Economic DEvElopmEnt founDation

As Executive Director of the Sierra Vista Economic Development Foundation (SVEDF), Mignonne Hollis received the 2013 Governor’s Excellence in Economic Development Award. The award recognized SVEDF for The Business Complex, which includes a 4,300 SF co-working facility that provides workspaces and resources to entrepreneurs. Eleven startups have utilized the facility and resources. Two of those businesses grew enough to move into another space, three businesses hired additional staff and four businesses expanded or relocated to Sierra Vista.

Hollis supported development and expansion of the Unmanned Aircraft Systems (UAS) industry by creating

36 | May-June 2014

ArizonA AssociAtion of Economic DEvElopmEnt

37

a private UAS test site when Arizona failed to receive the FAA national test site designation. More than 100 testing hours of airspace are committed, and $250,000 of facilities construction are planned.

Hollis collaborates within the UAS industry as an appointee to the Greater Arizona Development Authority. She serves as President of the AZTRC UAS Industry Consortium and was nominated to be treasurer of the local Association for Unmanned Vehicles System International. She is on the IEDC’s Public Policy Advisory Board, which allows her to monitor and review the legislative affairs and federal relations by providing a list of legislative issues, recommending strategic and policy actions and providing guidance for the Economic Development Summit.

Hollis completed the requirements for the CEcD and plans to take the exam in December. She participates in the AAED Southern Arizona Membership Committee and helped form the southeastern Regional Economic Development Group, which brings synergy to the economic development efforts of Cochise County communities.

New memBer oF tHe yeAr:marcElino florEs, council mEmbEr, pascua yaqui

During his first year as an AAED member, Marcelino Flores recruited three new members and worked with the Southern Arizona Membership Committee and Casino Del Sol in organizing the Southern Arizona Luncheon.

Flores embodies the three AAED organization pillars of education, advocacy and collaboration. As a pivotal contributor in organizing a tribal visit for AAED’s Tribal Economic Development Committee, Flores showed his belief in helping Arizona tribes strengthen their relationships with the state and local municipalities. The luncheon occurred during the Pascua Yaqui Tribe’s Annual Recognition Day, which provided AAED members

an opportunity to learn about the challenges the tribe encountered in establishing federal recognition. Members had an opportunity to meet with other council members and speak with Tribal Chairman Peter Yucupicio and historian David Ramirez.

Flores participates in Maricopa Association of Governments (MAG) and Pima Association of Governments (PAG). He is an active member of AAED’s Tribal Economic Development Committee and has attended a multitude of AAED functions. He is involved in other community and professional organizations such as the Metro Chamber of Commerce, Tucson Regional Economic Opportunity, Hispanic Chamber of Commerce, Imagine Greater Tucson, Pima Association of Governments and Nineteen Tribal Nations Workforce Investment Board.

workForce prActItIoNer oF tHe yeAr:ricHmonD vincEnt, cHairman & cEo, gooDWill of cEntral arizona

Richmond Vincent’s vision is to eliminate unemployment in Arizona. He led Central Arizona’s division in setting new records in people served and job placements achieved, 66 percent and 88 percent respectively, which resulted in an economic impact of $734M. His team provided job training and employment placement services to 60,000 Arizonans, filled 23,500 local jobs

and raised $500,000 in new revenue.Vincent helped develop and

implement programs to improve job seeker employability such as the Computer and Customer Service Training program. Vincent’s team partnered with local employers to develop a curriculum with vocational training in career preparation, human relations and basic computer skills. Five-hundred and seventy-eight

individuals attended and 73 percent achieved job placement.His team opened five new Goodwill Career Centers and hosted

its first Goodwill Career Expo, bringing 150 employers hiring for nearly 7,000 open positions. More than 6,000 people attended, leading it to be one of the largest hiring events ever held by Goodwill. Goodwill of Central Arizona is No. 1 in job placements in the organization.

LArGe orGANIzAtIoN oF tHe yeAr:city of mEsa, officE of Economic DEvElopmEnt

The City of Mesa invests in increasing the number of its staff joining AAED each year. Staff members participated in more than 22 trainings, classes, luncheons, conferences and events, including the IEDC Annual Conference, ICMA conference and training session, NBIA Incubator Management Training Program and GPEC training seminar.

The City of Mesa OED sponsored and hosted two AAED exclusive events: the Legislative Luncheon and the AAED Business 2 Baseball day at Cubs Park.

It partnered with the Neighborhood Economic Development Corporation and the Sustainable Communities Consortium to host Mesa’s Urban Redevelopment Summit. More than 100 members attended and were instructed on topics such as emerging urban markets, community banks, the value of walkability in real estate investments and sustainable communities to spur redevelopment opportunities in the community.

Mesa collaborates with neighboring cities and public-private partnerships to create jobs, capital investment and education in the area. It opened five new colleges and universities, began offering 25 full-time undergraduate programs and launched the Mesa Educates U campaign. One major project includes the Phoenix-Mesa Gateway Airport that was crucial in keeping Able Engineering in Arizona.

38 | May-June 2014

ArizonA AssociAtion of Economic DEvElopmEnt

Best oF ArIzoNA:arizona statE univErsity

It’s all in the name. This award, last given to Arizona Tourism and Sports Authority in 2008 and to IGC/TGen in 2003, is one of the least frequently awarded by AAED. Since 1996, five entities have been named “Best of Arizona,” an award that recognizes statewide contributions to economic development. Over the last decade, Arizona State University has developed a New American University with which the school assumes responsibility for the economic, social and cultural vitality of the communities that surround it.

Since 2001, ASU has grown its classroom, lab, library, residential spaces by more than 76 percent.

ASU is the seventh largest employer in Arizona with a payroll of $910M. The University was responsible for $275M in labor income and consumer spending by staff, students and visitors supported an estimated $422M. Each ASU football game also raised $9.4M for Tempe. It’s estimated that out-of-towners spend 230,000 visitor-days in Phoenix because of University-related activities.

The University also plays a role in business retention and expansion, from the General Motors Innovation Center to GoDaddy Global Technology Center at ASU’s Research Park.

Outside of Arizona, ASU is making an impact on other institutions looking for a working model by which to shape their New American University program. ASU President Michael Crow fielded a few questions about the university’s progress and its effect on Arizona.

Congratulations to ASU and you for winning this award. This is actually the second time ASU has won an EDDE. The first was in 2001, when it recognized the ASU Research Park. This year’s award is largely due to ASU’s adoption of the New American University. The Best of Arizona award is given in recognition of statewide contributions to economic development. In just a few words, how has the relationship between the University and state changed in the last 10 years?

The relationship is one in which we’ve taken down the walls of the university to the extent that the university is responsive to needs of the community. Our design aspirations (there are eight of them) are of a university that’s more impactful and linked to Arizona. In the past, many universities are marginally linked to the outcomes of the community.

what were the needs that led to the New American model?The needs were far too cut off from the ebb and flow of economic opportunity

and far too cut off from being, if you will, a force for change, growth and success. That’s our motivation. Our university was not being all it could be for the university.

Did you expect the scale of economic impact caused by the university’s evolution?

We desired to be of more value, more impactful, something that was a more powerful asset.

with regards to the New American University, what has been the most surprising/proud moment in the last decade?

I think that the exciting thing for me has been the responsiveness from our faculty and staff, their commitment to Arizona, the families of Arizona.

you’ve been quoted as saying higher education cannot assume that its competitive position in the world is unassailable. what’s the key to keeping up the momentum you’ve achieved?

I think the key is to be more deeply committed to the community and its success than the university.

smALL orGANIzAtIoN oF tHe yeAr:vErDE vallEy rEgional Economic organization, inc.

Verde Valley Regional Economic Organization (VVREO) strongly supports AAED and economic development in Arizona. Many of the members of the Board of Directors have been active in AAED activities and committees. VVREO also sponsored a speaker series featuring the “BoomTown USA’s Millenials: Supercharged Entrepreneurs” presentation. VVREO secured sponsors for several high school seniors and recent graduates to attend, which helped spark on-campus entrepreneurial clubs at Red Rocks High School and on the Yavapai-Apache Nation Reservation. Many members work with regional teams, such as the Yavapai County Sector Strategy Team, that focus on industry collaboration to grow the economic sectors of medical technology, precision manufacturing, renewable energy and viticulture. VVREO served as an incubator for the Verde Valley Wine Consortium, the regional wine industry trade association and the Verde Valley Agriculture Coalition and is working to establish a major food hub for the area.

Another regional project focus is the completion of Highway 260, which will provide access to the Verde Valley from I-17. Numerous VVREO Directors worked with the regional committee and testified before the ADOT Board of Directors, obtaining $66M commitment to complete the highway.

wILLIAm LAmpkIN AwArD:brian DalkE

As the first Economic Development Director and Deputy City Manager for the City of Goodyear, Brian Dalke has contributed significant growth in economic development. It's only appropriate that he also wins one of the most prestigious EDDE awards this year. According to the latest census, when Dalke started in 1994 the city had 10,473 citizens and by the time he left in 2004, the city had grown to more than 40,000

residents. Dalke has contributed to the economic development of Goodyear as a lead negotiator for Goodyear’s Development Agreement with Westcor for its 1.2 MSF regional mall, negotiated $55M improvements of infrastructure, recruited the Cleveland Indians and Cincinnati Reds Spring Training baseball stadiums, facilitated key locates with major corporations and negotiated with Cancer Treatment Centers of America, which created more than 650 jobs and $150M in capital investment.

Dalke has affected AAED as a member and president. He coordinated the search and interview process for the association’s director in 2011, helped the AAED take on the Arizona Basic Economic Development Course from the University of Arizona in 2012, and for the past two years has taught the Economic Development Finance module for the course. As a constant supporter of Luke Air Force Base, Dalke has ensured that the city updated its general plan, limiting the encroachment of housing and helped bring the F-35 to the state. He also strongly supported the Greater Phoenix Economic Development Council, which brought many corporations to Goodyear.

phoenix is a city of extremes, but lenders will see some balance in the market this year. There’s more capital flowing through the system than there was a year ago and,

despite a slow recovery, Phoenix investors should find it easier to get loans in the market.

"This is an exceptional time to acquire financing for real estate," says James DuMars, managing director of NorthMarq Capital. "The majority of lenders are planning to place more than they did in 2013 and offering competitive interest rates and terms. The properties look good as income trends are up over the past couple of years as are occupancy rates. The lenders still perceive upside to many of these projects because rental rates are still below where they were at the top of the cycle. It will be a busy year."

NorthMarq is one of the largest privately held commercial mortgage banking companies in America and represents many life insurance companies. Recent policy changes have changed

FINANCE

40 | May-June 2014

seeING GreeN:BANK ROLES SHIFT IN REAL ESTATE MARKET, HIGH TIME TOFINANCE REAL ESTATE By AMANDA VENTURA

how life insurance companies reserve commercial loans, which DuMars says lowers reserves set aside for each loan.

"This means real estate loans will be more attractive going forward and more profitable," he says.

Jim Pierson, principal at Legacy Capital Advisors, recently financed a deal in less than a month’s time — an acquisition deal that would typically take 45 to 60 days to complete. What made the deal even more interesting, he says, is it was for a value-add property that was less than 50 percent leased. Finding a non-recourse loan like that would have been unavailable a year ago, he adds.

“Phoenix has higher highs and lower lows than most places ... The capital markets are virtually back in full swing,” says Pierson. “Lenders are originating loans in the 75 percent loan-to-value (LTV) range for commercial projects and 80 percent LTV for multi-family. During the boom, you could get a 10-year interest-only (IO) loan. Interest-only loan periods went away in

2009, but have come back into the picture. Borrowers can get a five-year IO loan at full leverage and full term IO for lower leverage deals.”

Pierson says his clients are actively purchasing real estate with longer term interest rates due to the sense “that rates cannot stay this low for too much longer.”

“From the lender’s perspective, the Phoenix MSA is a great place to lend money again,” says DuMars. “Lots of transactions are getting done. The perception of the lending community is that we are on the upswing in the cycle. We have positive job creation, a healthy housing market (with new construction), positive net in-migration and a lower unemployment rate than the national average.”

Alliance Residential CFO David Lodwick says several debt and equity companies that have previously focused on larger coastal markets are coming to Phoenix.

“Financing has become more institutional in nature as

41

"This is an exceptional time to acquire financing for real estate. The majority of lenders are

planning to place more than they did in 2013 and offering competitive interest rates and terms."

James DuMars,NorthMarq

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42 | May-June 2014

Phoenix has established a stronger national brand,” Lodwick says. “There is a significant demand for high-quality apartments, and it has been ideal to be involved in financing such a strong investment sector.”

Multi-family has dominated the commercial real estate market at $2B in sales in Phoenix, making it attractive to lenders. This continues to be the case. Multi-family has seen the most active financing in new construction financing and acquisition/refinances, Pierson says, adding that the next most active sectors are retail, office and industrial.

“We compete with all asset classes for capital and are seeing that competition increase as the market recovers,” Lodwick says. “The past few years of recovery was largely focused on multi-family, which has been great, but it is also great to see other commercial asset classes rebounding, as the related job growth is a strong driver for multifamily demand.”

Office vacancy dropped from 19.5 to 18.9 percent in the 1Q and home ownership is down to 65 percent, which has pushed people into multi-family living situations. Jones Lang LaSalle Vice President of multi-family sales and leasing Charles Steele adds that Fannie Mae and Freddie Mac have started to diminish loans put into the multi-family space by 10 percent every year.

“Significant policy changes have created additional guidelines and regulations that impact construction lenders, and have increased reporting requirements,” says Lodwick. “With great partners, we are always able to work through these changes, but it has clearly changed the perspective of lenders. The policy changes will make it tougher for sponsors who do not have a strong track record and history to obtain construction debt. In addition, the permanent financing market — which provides much of the liquidity for the multifamily asset class through government-sponsored entities such as Fannie Mae and Freddie Mac — has been subject to much discussion on housing reform. We believe the success realized by the GSE’s multifamily finance capital will provide for future expansion.”

The industry is seeing the strongest improvement in industrial and hospitality markets. Well-located, anchored retail is slowly improving, says Joe Bleyle, senior vice president of Enterprise Bank & Trust.

“After enduring a number of false starts, most of our clients are cautiously optimistic that the commercial market is recovering,” Bleyle says. “While the rebound in residential prices has certainly been a positive dynamic for the Phoenix economy, commercial developers and investors want to see that translate into stronger permit

Joe Bleyle James DuMars Brandon Harrington David Lodwick Jim PiersonJoe Bleyle James DuMars Brandon Harrington David Lodwick Jim Pierson

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FINANCE

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numbers and job creation.”Job creation, Bleyle adds, will improve office vacancy

in particular.“Lender appetite is strong for multi-family and

industrial projects right now and nearly any commercial building that is owner-occupied by a stable company,” Bleyle says. “Financing is fairly difficult to obtain for investor office and almost non-existent for land.”

DuMars says lending is even across the board. "With the full return of the CMBS market we are

very busy financing retail shopping centers that were held on the sidelines by the borrowers up until now," he says. "Many owners have decided to refinance instead of sell now that they have the ability to pay off their maturing loans."

“We’re starting to see investor interest in more traditional suburban projects in the southeast Valley,” adds Lodwick.

This interest is garnered by the high-wage jobs announced this year — from the Apple manufacturing facility to the Intel expansion.

“You’ve seen some of the capital partners recognize that and desire to be there to take part in that cycle,” he adds.

Recent policy changes within the CMBS and life insurance industry will make it easier for both lenders to be more active in 2014, DuMars said. Life companies, for example, may see the amount of reserves they held for real estate loans cut in half.

"Real estate debt is a preferred asset class by life insurance companies and institutional investors," says DuMars. "Fear about pending maturities between 2015 and 2017 causing defaults has greatly abated."

Rates are going to stay low in 2014 as CMBS becomes more aggressive and more banks are willing to lend, predicts Walker and Dunlop’s Brandon Harrington.

“I think 2014 is going to be a great year for borrowers — at least for the first quarter, potentially lower refinances and more deals,” he says.

Though life companies and CMBS can expect a better year in 2014, their struggles have changed the climate for bank financing.

The low cost of funds and weak demand for construction and bridge loans has made the industry more competitive among banks for term loans, says Bleyle.

“There’s a lot of capital, it’s just a matter of finding good deals to invest in,” says Harrington.

"Lender appetite is strong for multi-family and industrial projects right now and nearly any commercial building

that is owner-occupied by a stable company."Joe Bleyle,

Enterprise Bank & Trust

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asking about a solid investment is a loaded question, says Certified Commercial Investment Member

(CCIM) Jason Eisenberg, vice president of development and acquisitions for the Eisenberg Company.

Commercial real estate investment returns are expected to remain steady through year-end, according to a forecast released by Real Estate Research Corp. Deloitte and the National Association of Realtors. However, there are still uncertainties in that equation.

“I am still concerned that we are not seeing the job numbers where I believe they need to be in order to feel like we’re off the edge of the financial abyss,” says CCIM Alan Davidson, vice president of ORION Investment Real Estate. “As a secondary market to Los Angeles, I’m hopeful, but not confident, we’re on a longer upward trend. The lack of growth in the housing market is particularly vexing as it has historically been a barometer of the local economy. This last recession may have permanently altered that trend.”

It’s predicted that returns on investment in commercial properties will be lower in 2014 than 2013 due to an increase in development costs as the economy rebounds.

“We have seen a dramatic increase in costs from both the land acquisition side and the materials and labor side. Rental rates have not caught up to these increases,” says Eisenberg.

There were bargains in 2013. In 2014, investors must go to smaller secondary and tertiary markets to find value.

“Bargains are scarce and often never see the light of day before sold,” Davidson says.

Depending on the quality of the asset, Eisenberg says, sellers are definitely feeling more bullish and buyers are still trying to find deals. That being said, deals are still getting done so that separation is being filled. Davidson notes that sellers are valuing properties at 2005 and 2006 levels.

“Buyers are having to contribute more

equity and are concerned about paying too much in this market versus a market like Los Angeles or San Francisco, plus lenders are imposing more stringent underwriting criteria, thus dampening the ability to obtain leveraged funds with favorable terms,” Davidson says. “There’s still a gap, but one that can be bridged if both parties exhibit reasonable expectations. How much depends largely on type of property. There appears to be more interest in our market from buyers outside Arizona which is a very positive trend.”

This is something Attorney Howard Weiss, of Nussbaum Gillis & Dinner PC, has also observed.

“Over the past 24 months, there was a large influx of Canadian buyers that were mostly purchasing multi-family assets,” he says. “While there are still many Canadian buyers, the numbers have definitely decreased. I attribute this to the fact that there are less multi-family properties available, and the Canadian dollar is now weaker against the US dollar. In addition, these buyers are not seeing the low property values that initially attracted them to the Phoenix market. Some of the current Canadian buyers, however, are diversifying their portfolios by purchasing retail and office properties, including medical offices.”

Another trend Weiss noted was more sophisticated buyers, such as large institutions, entering the market.

Retail and multi-family are solid in the Phoenix market, Davidson says, adding that office has a long way to go and based on the industrial he works with, self storage, it’s a little flat.

“It all gets back to location,” Eisenberg says. “From a grocery anchored development and acquisition standpoint it will be very interesting to see what

challenges and opportunities arise over the next 24 months with the Cerberus acquisition of Safeway.”

The value-add opportunities, he says, are in land. Davidson suggests looking at infill and multi-family.

“I was listening to a speaker at ICSC in Texas and he had a great quote, ‘We do not have an over-development problem, we have an under-demolition problem.’ A lot of the product out there that is deemed a value-add opportunity has little to no value except in the land,” Eiseinberg says. “The viable value-add product is all up to the relationships that the buyer has with its retailers and there are some groups in Phoenix that are doing an excellent job revitalizing old centers with new tenants.

“I see the grocery-anchored projects continue to see cap rate compression. I also see investors not seeing the returns they are needing in primary markets and turning more toward secondary and outlying markets.”

Eisenberg doesn’t see a sharp increase in interest rates in the next two to three years.

“I think there will be a modest increase as our economy finds its footing, but that will hopefully be absorbed by rental increases and higher valuations,” he says.

Davidson calls the upcoming midterms absolutely critical. “More transactions are structured as 1031 Exchanges,” Weiss says, “since there are increasing property values that result in taxable gains upon a sale.”

“There are a number of tax proposals working their way through Capitol Hill that would deliver a massive hit to the commercial real estate world, most particularly ending 1031 Exchanges,” Davidson says. “Fiscal conservatives must obtain control of the Senate and maintain their House majority.”

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chandler’s Economic Development Director, Chris Mackay, loves her city. Over the last 100 years, it has

gone from being an agricultural hub that relied on cotton, alfalfa, corn and ostrich farms to a place where its largest employee base comes by a long shot from semiconductor chip maker Intel. Despite such large growth in recent years and a passion for the city, Mackay will be the first to admit only a visionary developer such as The Rockefeller Group (RGI) could take Chandler to the next level. The developer, which has three projects in the pipeline for the city, is raising the bar and quite literally skyline.

“When you look at the development they have in planning (RG-Chandler 101, on the SEC of Chandler Boulevard and Loop 101), it takes a development group who’s visionary to envision eight- to 10-story building in Chandler,” Mackay says. “I love Chandler. I can see it all day long but it’s hard selling that to a development organization...Rockefeller saw the vision five minutes into our first conversation.”

Currently, the tallest building in Chandler is five stories.

Vision is key for RGI, which moved to the Valley in 2006 with the purchase of five parcels primarily located in the soon-to-boom southeast Valley. The parcels,

brokered by Colliers International, are strategically located in Chandler, by the Loop 101 and 202 freeways, Morris Ranch and Phoenix-Mesa Gateway Airport. Gilbert is also seeing plans for premium multi-family developments and flex office space come to fruition.

RGI has an 84-year history rooted in a survival of the economic depression of the ‘30s. When Rockefeller Center was constructed in Manhattan, N.Y., it was a structure that stood for everything Rockefeller Group is now — resilience, vision and patience.

Colliers’ Phil Breidenbach’s reflection on his experience with RGI echoes such sentiment.

“I marvel at how many times they say no when others say yes and they always get the deals they want to get,” Breidenbach says.

The five parcels RGI purchased happened in a span of 18 months, Breidenbach says. The rest is history.

About six months later, an experienced developer for a Michigan-based masterplanning company stepped into the role of RGI’s regional director.

“I watched Rockefeller Group continue to purchase property in the SE Valley but knew they had nobody based here,” says Mark Singerman. “When I saw the handwriting on the wall in 2007 that the

48 | may-June 2014

THE ROCKEFELLER GROUPCOMPANY PROFILE |

49

liv at nortgate

50 | may-June 2014

housing market was way overheated, I reached out to Rockefeller Group.”

At the time, Tom McCormick, the company’s West Regional Development Office based in Irvine, Calif., was laying the foundation, from Tucson to the Valley, on which Singerman would build. RGI, anchored by stable holdings at Rockefeller Center and owned by Mitsubishi Estate, is one of the largest real estate companies in the world. For Singerman, who wanted to get back to his roots developing buildings instead of just infrastructure with six-inch curbs for master planned communities, it was a strategic and fulfilling decision to join.

“Rockefeller Group International has started to decentralize a little,” says Singerman. “That initiative is still evolving. Mitsubishi Estate also now has one of its senior executives as the CEO of RGI, which is the first time since the acquisition in the 1990s.”

Rockefeller’s position is strong, Briedenbach says, not only for its foresight in the southeast Valley potential but also for its survival of the recent recession. Rockefeller Group is an insular all-cash company.

“If you recall how robust the Phoenix economy was from 2002 to 2007, it was the place to be for real estate companies from all over the country,” Singerman says. “Of course, had everyone known that the music would stop by the end of 2007, they would never have bought land here in 2005 through 2007. Not unlike many experienced real estate companies, RGI invested in what it thought was a stable market. Fortunately, they invested in very well located land in the southeast

Valley and paid all cash so we were able to weather the storm without having to deal with lenders.”

With nothing to lose and a shared vision with the economic leaders of two of the fastest growing cities in the Phoenix Metro, Rockefeller Group began developing the Chandler Corporate Center.

Though Chandler doesn’t have a quantified analysis of the economic impact of the Chandler Corporate Center tenants, Mackay says the company’s development has been a “tremendous asset” to the city.

“RGI always tries to match market demand with the vision of the municipality for any land it purchases before committing to the transaction,” Singerman says. “So we met with Chandler and Gilbert very early in the process and there was a shared vision for each property. Had that not been the case, RGI would most likely have looked elsewhere. We have been in sync with Chandler and Gilbert on our land holdings since the very beginning of the relationship. In 2009, we successfully processed the zoning and entitlements on all of our properties in Chandler and Gilbert. That shared vision proved to be mutually beneficial.”

Chandler is known for its office market — its vacancy is hovering just above 4 percent. But it’s not just the flexible workspaces and much-needed space that brings value to Chandler.

“Our first office building at CCC is anchored by Broadcom and Vantiv, both Fortune 500 companies,” Singerman says. “We expect both of them to grow given the strategic location near Intel,

THE ROCKEFELLER GROUPCOMPANY PROFILE |

Chandler Fashion Mall, Price Corridor and freeways.”

Mackay agrees, adding, “We have great development partners but, in particular, Rockefeller Group’s vision wasn’t traditional development. It was setting a new bar.”

Rockefeller Group has completed more than 40MSF of office and industrial projects across the United States. The company’s current development pipeline

Phillip Breidenbach Rob Glaser

John Grimaldi

chris mackay

dan Henderson

mark Singerman

Tucson distribution center

52 | may-June 2014

THE ROCKEFELLER GROUPCOMPANY PROFILE |

liv at northgate

is potentially 28 MSF. In Arizona, Rockefeller Group just broke ground on an 82KSF spec office/flex building at Chandler Corporate Center (CCC), the second spec building at the location. In 2013, Rockefeller Group broke ground on the first phase of Liv Northgate, a 402-unit multi-family project at its North Gateway mixed-use development in Gilbert. Liv Northgate, a joint venture with Investment Properties Associates, is RGI’s first multi-family development in Arizona. In 2009, Rockefeller Group completed a 70KSF office building at CCC and also a 114KSF industrial building at its Distribution Center in Tucson near the airport. Also in the pipeline, Rockefeller Group has infrastructure projects underway to install roads and utilities at three of its properties to position them for buildings.

“As soon as we find the right anchor office tenant, we will start on the first building at Rockefeller Group Chandler 101 with a 10-story, 330KSF Class-A office building,” Singerman says of the 840KSF total build-out potential of Chandler 101. Based on an internal model at the City of Chandler, RG-Chandler 101 will have a primary economic impact $92,582,000 over a

10-year period, Mackay says. When secondary impacts, which include how many times a dollar is moved around in an economy, are added the total over the same time period is $226.5M.

When it comes to Gilbert, its Director of Economic Development Dan Henderson said the following about Rockefeller Group’s economic impact on the town with its sprawling North Gateway project.

“This development ultimately provides live and work amenities in Gilbert and supports Gilbert’s five-year strategic plan to add 10,000 new jobs,” Henderson says. “North Gateway is important to the long-term development of Gilbert because it provides mixed use space and increases employment opportunities for residents and brings people closer to the things they need on a day-to-day basis.

“The Rockefeller Group sites in Gilbert are unique in their location and both sites include flexible business park and light industrial uses in two strategic employment corridors located off the 202 and the Knowledge Power Corridor,” Henderson adds.

SOUTHERN ROCKAs mentioned before, Rockefeller

Group’s influence extends south to Tucson.

“We’ve had a long-term relationship with them even before they came to Tucson,” says PICOR’s Rob Glaser, who with Peter Douglas, has nurtured a relationship with McCormick since the ‘90s. It was in 2005 that Glaser remembers McCormick started looking at parcels in Tucson. In 2005, the market was well-occupied and Rockefeller Group saw a need for quality building product. RGI bought the parcel where the Tucson Distribution Center currently sits, near the airport and Interstates 10 and 17, in 2006. In 2009, Rockefeller built the city’s first LEED-certified industrial building.

“It’s widely recognized as the most attractive and functional distribution facility in Tucson, but the market has been soft,” Glaser says. The facility is 50 percent leased.

Tenant John Grimaldi, a general manager at Safelite Auto Glass, was one of the first tenants in the building and has since doubled in size (from 17KSF to 35KSF) with a 30 percent increase in staff and record sales. Grimaldi particularly sites the beauty of the building, green appeal, high ceilings and central location as big draws for him and his company’s corporate real estate department.

“It’s not “the chickenor the egg?”

“It’s the egg!Build housing andthey will come.”

-Doug Whitneybell

Whitneybell Perry Architects

53

Gilbert Crossroadsdeveloper: Rockefeller Group InternationalbrokeraGe: colliers InternationalloCation: SEc Germann Road and mustang drive, Gilbertsize: 45 acressubContraCtors: civTech, dry Utility ServicesGilbert crossroads is a six-building office and flex-space development with 1,640 parking spaces. Three of the buildings are one-story flex developments. The three office buildings range from two to three stories.

roCkefeller Group distribution Centerdeveloper: Rockefeller Group InternationalGeneral ContraCtor: chestnut constructionbrokeraGe: PIcoRloCation: 6855 S. lisa frank Ave., Tucsonsize: 411,664 SfThis distribution center is a hop off the Interstate 10 or 19 with proximity to Tucson International Airport and davis-monthan Air force Base. The center is a complex of three large 100kSf+ buildings, one of which consists of six smaller suites between 16kSf and 18kSf. The first of the three buildings, a 113kSf speculative distribution building, was completed in may 2009.

proJeCts in the pipeline

54 | may-June 2014

liv northGatedeveloper: Investment Property Associates/Rockefeller Group InternationalGeneral ContraCtor: mccW Builders llcarChiteCt: Whitneybell Perry, Inc.loCation: 455 S. Recker Rd., Gilbertsize: 1,032,372 SfSubcontractors: Terrascape consulting, Anderson Baron, Western Technologies, nP mechanical, Inc., nP Engineering, landa & Associates, dry Utility ServicesThis is Rockefeller Group's first multi-family development in Arizona and joint venture with Investment Property Associates. liv northgate is a 402-unit development that offers six different floorplans, a bark park, fitness pool, splash pool with volleyball, hot tub, 24/7 fitness center, 1-mile walking path, car care center, valet dry cleaning and recycling/trash services, private garages and outdoor kitchen and lounge areas, among other things.

Investment Property Associates Partner Bill fettis, lef t, and Rockefeller Group Vice President and Regional director of Arizona, mark Singerman, at liv northgate. IPA and RGI entered a joint venture for its first multi-family development in Arizona.

THE ROCKEFELLER GROUPCOMPANY PROFILE |

55

north Gatewaydeveloper: Rockefeller Group InternationalGeneral ContraCtor: WespacbrokeraGe: colliers InternationalloCation: nWc South Recker and Warner roads, Gilbertsize: 157.4 acressubContraCtors: Atwell, Western Technologies, civTech, dry Utility Services, Wright Engineering corporationThis masterplanned community includes liv northgate, a premium multi-family development, an ldS site, 35.7 acres of a business park, 83 acres of light industrial (which equates to a little more than half of the project’s space), and 12.2 acres of community commercial.

Chandler 101developer: Rockefeller Group, InternationalarChiteCt: davisbrokeraGe: colliers InternationalloCation: SEc chandler Boulevard and loop 101 (Price Road)size: 844,400 SfsubContraCtors: david Evans and Associates, desert Adaptive landscape Architecture, Western Technologies Inc., civTech, TlcP, dry Utility Services, Wright Engineering corporationRG-chandler 101 is three eight- to 10-story class-A midrise office buildings with potential for two restaurants and ground floor retail space. It offers more than 1mSf of potential development. Plans include space for a 220- to 300-room full-service hotel and phase I will have Arizona State University’s W. P. carey mBA program on-site. This site is all about movement, whether it’s a pedestrian main street between buildings or the ingress/egress to chandler Boulevard and loop 101. RG-chandler 101 is located across from the chandler fashion center and is within half a mile of 46 restaurants, five hotels, 2.3mSf of retail. The GPlET property tax abatement/reduction program is meant to reduce operating costs, its designated redevelopment area further reduces taxes and chandler’s economic development program also offers incentives for new job creation.Chandler Corporate Center iii

developer: Rockefeller Group, InternationalarChiteCt: davisGeneral ContraCtor: Wespacproperty ManaGeMent: colliers International brokeraGe: colliers InternationalloCation: 485 n. Juniper dr., chandlersize: 82kSfsubContraCtors: Hunter Engineering, desert Adaptive landscape Architecture, Speedie & Associates, caruso Turley Scott, dry Utility Services, SignlineThe chandler corporate center is a master-planned business park of flexible office space built for the modern workforce with potentially divisible suites. It can accommodate office, lab and assembly uses and is located between Intel’s R&d facility and lab. Approximately 9 acres of 24.3-acre site is available for build-to-suit construction and can accommodate up to 110kSf of office or light industrial space. The center has access to three freeways and the Price Road corridor. much like the chandler 101 development, the chandler corporate center is located near the chandler fashion Square and dozens of restaurants.

Chandler Crossroadsdeveloper: Rockefeller Group InternationalarChiteCt: Balmer Architectural GroupbrokeraGe: colliers InternationalloCation: nWc Gilbert and Queen creek roads, chandlersize: 560kSfsubContraCtors: david Evans and Associates, laskin & Associates, Speedie & Associates, civTech, dry Utility Services, Wright Engineering corporationThis business park consists of a 300kSf fedEx facility and two light industrial buildings that total 250kSf plus three retail pads for sale.

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Over the last 17 years, Doug Leventhal has been involved with all aspects of retail development,

from acquisition to disposition, and is currently involved with overseeing and directing day-to-day operations and development of commercial projects nationwide. Leventhal has worked in more than 50 jurisdictions and nine states. He is also the designated broker for Evergreen Commercial Realty, which is the brokerage arm of Evergreen Devco.

At the encouragement of a former Valley Partnership Chair and Evergreen Managing Principal Gregg Alpert, who passed away in 2010, Doug Leventhal joined VP in 2001. He began his journey through leadership as co-chair of the City County Committee, chair of the Membership Committee, and was elected as an ex-officio board member in 2009. Leventhal was subsequently elected to the board of directors in 2010 and on the executive committee between 2011 and 2013. In addition to being the chairman of the 2014 board of directors for Valley Partnership. Leventhal also serves on the Real Estate Council for Arizona State University’s Master of Real Estate Development program, is a Trustee of Valley Partnership political action committee and appears as a guest lecturer at ASU and International Council of Shopping Centers (ICSC).

What are Valley PartnershiP’s goals for 2014? Valley Partnership’s goals for 2014 were created by our board of directors in our annual strategic planning session held in late 2013. We are primarily dedicated to representing our private sector and government partners, in the promotion and protection of the commercial real estate development industry. Because of the increase in activity in our market, we have the opportunity using our sold-out events and effective electronic communication to bring partners together to do business with each other. In addition, we are increasing our advocacy efforts at the federal, state and municipal levels to support positive legislation and confront and oppose any overly restrictive regulation that would hinder our Partners ability to develop real estate projects.

What are Valley PartnershiP’s biggest obstacles this year?The biggest obstacle and challenge we face this year is the rapid movement of the market. As opposed to the last several years, projects are coming on line much faster and our partners have to be informed and react at a much quicker pace. Valley Partnership, through our committee structure, provides multiple forums for our Partners to be informed of the market opportunities and potential negative issues associated

with development. For example, in our City County Committee, development professionals meet face to face with municipal officials to discuss best practices to bring projects from initial application to final inspection. Through our partnerships, issues are resolved before they become problems.

What Were VP's biggest successes in 2013? Valley Partnership is only as good as its future leaders. Last year, we set out to identify the up-and-coming leaders in our industry and created a forum for them to get together, learn from the more experienced developers and raise interest in our organization. The inaugural class of 2014 is in full swing. We are excited about the future of that program. Also, our committee structures are as strong as they’ve ever been with clear goals and objectives. Membership is recovering strongly and we’ve seen an increased participation of partners at every level: Committee meetings are full, there is excellent board engagement and our signature Friday Morning Breakfast events continue to be sold out. Through it all, the retention rate of partner companies has been the best we’ve seen in recent years.

Abiding by the PrinciPAl

Chairman

60 | May-June 2014

&QA&&&&&&&&&&&&&&&&DOUG LEVENTHALPrincipal & COO, Evergreen Devco, Inc.

Read more online atazbigmedia.com/azre-magazine

VALLEY PARTNERSHIP

A VAlley Of PArtnersPArTNEr-TO-PArTNEr TrANsACTIONsbUILDING UP THE VALLEy ONE PrOJECT AT A TIME by AMANDA VENTUrA

Marina Heights is a development partnership between ryan Companies and sunbelt Holdings.

Fellow Valley Partnership member Cushman & Wakefield was awarded the leasing assignment.

62 | May-June 2014

VALLEY PARTNERSHIP

Cubs Park (lef t) is a project Markham Contracting Co. worked on. Liberty Center at rio salado (below) is a partnership between Liberty Property Trust and Markham Contracting Co. Eastmark (bottom) includes a partnership between DMb Associates and Markham Contracting Co.

When Valley Partnership was founded 27 years ago, it was on the principles of responsible

development. It has since grown to thousands of members throughout the commercial real estate community — from subcontractors to some of the largest developers in Arizona.

“In 2014 and beyond, Valley Partnership developer companies are the leaders of almost every major commercial real estate project announced, including Marina Heights, the numerous announcements of deals at Eastmark, and Liberty Center at Rio Salado,” says Valley Partnership President and CEO Richard Hubbard.

The members have rallied behind the idea of partnership, Hubbard says.

“These developers use Valley Partnership partners for all construction disciplines related to the project including planning, design, architecture, general contracting, engineering and even law and accounting,” Hubbard says. “Many of those ‘partner-to-partner’ transactions have come from long-standing relationships created through Valley Partnership. I would say that every level of partner in Valley Partnership, from board member to sole proprietor, is participating in the current commercial real estate building activity in the Valley.”

Some companies, such as Evergreen Devco, take the partner-to-partner very seriously.

Valley Partnership Chair of the Board Doug Leventhal is the principal and COO of Evergreen Devco. Though Evergreen has focused much of its recent work in Denver, the company finds exclusive value in partnership with fellow VP members for Arizona projects.

“I can say that for all our Arizona work, we tend to work exclusively with the companies that see the value in Valley Partnership and either are active members or active sponsors,” Leventhal says. “Our general contractors, for example, need to be members or sponsors almost as a prerequisite to getting our business. Our architects, engineers, attorneys and title companies need to be members of Valley Partnership — or have a good reason why they are not! It’s important to Evergreen that we collectively support Valley Partnership since we all benefit from its mission to promote responsible development in the Valley. We are all connected in this unique way.”

That unique connection, as DMB Associates President Charley Freericks sees it involves Valley Partnership’s advocacy role for developers as well as a genuine

passion for making Arizona a great place to live.

“Valley Partnership understands that real estate isn’t the only driver of the economy,” says Freericks. “We are the beneficiaries of a strong and growing economy and it’s in our interest to make this a great place to live.”

Freericks, who has been a member for 10 years, served on the board of directors, was chairman in 2009, and has sat on multiple committees.

Most of DMB Associates’ partners at the developers’ 6,000-acre masterplanned community of Eastmark – and around the Valley - are Valley Partnership members, Freericks says.

“Over the years, we have worked with so many contractors, consultants and service providers who are members it would be hard to name them all,” he says. “In fact it might be difficult to find any that aren’t members.”

Valley Partnership has multiple avenues for paving those partnerships. There are 10 committees, including one for an annual golf tournament and a community building project. One of the most popular and frequent member events, is the Friday Morning Breakfasts — a monthly morning panel discussion about an industry trend featuring local experts.

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Freericks reflected on a breakfast about the impact and trade partnership Arizona has with Canada as a particularly helpful one for his masterplanned communities of Eastmark and Victory at Verrado, which target Canadian homebuyers.

“Valley Partnership attracts important speakers and hosts debates of candidates for state and local offices which helps me make better informed decisions,” he says. “The Valley Partnership advocacy team was a huge help to the Fighter Country Partnership efforts to bring the F-35 mission to Luke. This will impact our economy for generations to come. Valley Partnership’s role as the champion for moderate regulation has impacted all of

our properties over the years and will continue to do so.”

Heather Markham, vice president of Markham Contracting Co., says her company has been a member of Valley Partnership since 1992 and is also a Stewardship Sponsor. Markham has attended breakfasts for the last five years and is one of the students in Valley Partnership’s inaugural Young Advocates Program. As a co-chair of the Community Project Committee, Markham says she also appreciate’s Valley Partnership’s commitment to networking and giving back to the community.

“I believe this involvement in the community is critical personally as well as professionally for everyone,” she says.

Markham has been self performing grading, paving and wet utilities civil infrastructure in the Southwest since 1977. Though Valley Partnership has only been around since 1987, Markham says the company has worked with many current Valley Partnership companies for nearly four decades. Partners include DMB Associates (Verrado and Eastmark), Macerich (Sonoran Crossing), Sunbelt Holdings (Vistancia), APS, Grayhawk Development, Lennar, Vintage Partners, MT Builders, HilgartWilson, Pulte, Atwell, Dibble Engineering, Wood Patel & Associates, Hoskin & Ryan, Siteworks, Speedie & Associates, Trench Shore Rentals, Alliance Bank of Arizona and Cemex.

“Valley Partnership plays a very strong role in responsible development of the commercial real estate community and provides an excellent venue for all the stakeholders in the process to come together and discuss issues and concerns as well as success stories,” she says. “This promotes strong partnerships between cities, counties, towns, state, land owners, developers, contractors, architects, engineers and every trade partner involved in making Arizona a great place to live and work.”

Vistancia (lef t) is a partnership between sunbelt Holdings, Markham Contracting Co. and Caretaker Landscape. Vee Quiva is another project Markham Contracting Co. worked on. (below)

64 | May-June 2014

VALLEY PARTNERSHIP

66 | May-June 2014

VALLEY PARTNERSHIP

Chris AnaradianDevelopment services Director,town of Queen creek

It’s Queen Creek’s time in the sun, boasts the town’s Development Services Director Chris Anaradian. Permit activity is “out of sight” and he cites his Valley Partnership involvement as a key ingredient while the town grows into its own.

“The situational awareness that Queen Creek gains from Valley Partnership is essential,” says Anaradian, who sits on Valley Partnership's Board of Directors. “Knowing the current areas of focus and growth that our private partners are focused on helps us plan and build a better government and community for all. Having a voice when new legislation and alliances are being formed helps us better prepare to fund and administer the services our customers have come to expect and deserve.”

Anaradian is the former community development director and development services manager for the City of Tempe. He managed the 220-acre Tempe Town Lake and 500-acre Rio Salado Project

during their initial five years. He also helped modernize multiple permitting and regulatory agencies and advocated for many developer-friendly shifts within the city, including those that precluded the Tempe light rail. Anaradian now has watched Queen Creek come through the economic recovery.

“It is now Queen Creek’s time in the sun, and so many opportunities lie ahead,” says Anaradian. “Our wash and trail system is poised to unite huge swaths of our community and become a defining geographic feature of life in Queen Creek. Large tracts of undeveloped hillside residential property are into entitlement, some of the last and most majestic in the Southeast Valley.”

tim BrislinVice President,harvard investments

Tim Brislin, an on-and-off member of Valley Partnership since 2004 who currently sits on the Board of Directors, has used organization’s networking opportunities

PArtnerProfiles

to broaden Harvard Investment’s exposure and partnership options.

Harvard Investments is a land investment and masterplanned community development firm.

“Harvard is laser focused on executing its vision and plans for its masterplanned communities in Mesa, Queen Creek/San Tan Valley, the West Valley and in Prescott,” Brislin says. “Our Mesa project, Cadence at Gateway, is very exciting and we are making great progress on our first residential phase, as well as getting traction on our retail and high density residential components much earlier than anticipated.”

In 2007, Brislin welcomed his first son and ended his “five-year job interview” with Harvard Investments.

“In both cases I was at the starting line staring at a wide open track. Today, in addition to my wonderful wife and two boys, and thanks to Harvard’s long standing market reputation, the faith of our partners and hard work, we built a high quality portfolio of assets that we will harvest for years to come.”

What many don’t know about Harvard is that its Canadian parent company, The Hill Companies, is a major commercial developer of office and retail, Brislin says. The company has expansion plans to include industrial, office and multi-family assets.

“Our current planning efforts are highly focused on demographic trends locally and nationally and how we plan our communities for the long-term based on who are buyers are, what products they want and what type of community they will embrace,” Brislin says. “There are shifts going on that affect all aspects of the real estate development business.”

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Kristina lockeMarketing/business Development Manager, hoskin ryan consultants, inc.

Looking for the latest news on the golf tournament? Kristina Locke sits on the committee for two-year member Hoskin Ryan Consultants, Inc. Locke comes to Valley Partnership with more than a decade of marketing, advertising and business development achievements for Hoskin Ryan and its clients.

Hoskin Ryan finished off 2013 with four new clients. Though they weren’t acquired through Valley Partnership, Locke is confident they will be this year.

“It does take a little while for people to get to know you and trust your firm,” she says. “We have formed great relationships and were educated on many different industry trends.”

Trends Locke is particularly interested in learning more about is the impact the Affordable Care Act will have on hospitals, physicians and companies such as Hoskin Ryan.

“More than anything, it would be great to be educated on how small-medium firms will be effected in the next several years,” she says. “I would love to see a panel of speakers who are watching these trends closely, such as executives of insurance companies, medical brokers, economist, hospital executives and/or physicians. Is the ACA ultimately heading to a single payer system? Will our taxes increase to support this act? Will ACA collapse based on the low volume of healthy individuals signing up? Or will it just be another system like Medicare for a certain population. Lastly, how will this affect the growth of Arizona?”

Jenifer Davis luntPartner, Davis enterprises

Davis Enterprises joined Valley Partnership last January — a big step for the closely held family business. Though Davis is one of the smaller development companies in the Valley and has a long history in the Valley, it has been a two-year sponsor of the organization. Davis Enterprises is actively involved in the identification, acquisition, development and management of real estate properties in Arizona.

Jenifer Davis Lunt became managing partner following an award-addled tenure at CBRE, where she became the first female at the Phoenix office named “Rookie of the Year,” for selling more than 100 properties totally more than $675M in value and 2.5MSF. In 2005, Davis Lunt was named CBRE’s No. 1 Investment Broker. The following year, her father retired from Davis Enterprises and named her partner and principal of a business her grandfather started.

“We are most proud of contributions Davis has made to the revitalization of Central Phoenix including the SWC of 7th Ave & McDowell, 4700 N. Central and Melrose Marketplace,” Davis Lunt says. The company is looking forward to the redevelopment of 21st Avenue and Deer Valley Road and 1015 S. Rural Rd., near ASU’s main campus.

Along those lines, Davis Lunt says a trend or issue she would like to see addressed by Valley Partnership is how the City of Phoenix can become more pedestrian, rail and bike dependent to allow for more retail and housing development in the urban core.

retired lt. Col. rusty MitchellDirector of luke air force base community initiatives team

Rusty Mitchell, director of Luke Air Force Base Community Initiatives Team, has been an ex-officio board member at Valley Partnership since 2005 and is the primary liaison between the Air Force base, nine municipalities, Maricopa County and state officials.

“(Valley Partnership) has enabled me to network with major developers and discuss development issues in areas that we conduct flight operations,” he says. “This communication enables developers and landowners to be better informed of state statutes for compatible land use before they obligate time and money to a particular project.”

The partnership has been mutually beneficial. Before retiring, Mitchell served 22 years in the Air Force as a fighter pilot. It is through his community involvement and history with the Air Force that Mitchell has managed to bring enduring economic development to the base and Arizona.

“The over-whelming community support of the mission of Luke AFB has been recognized by the senior leadership of the Air Force and was a significant contributing factor in its selection as the largest F-35 training base and the recipient of an eventual 144 F-35’s,” he says.

The selection of Luke to be the primary pilot training center for the nation’s most advanced fighter will ensure the existence of Luke AFB for many decades to come, Mitchell says.

“Not only is Luke critical in the nation’s defense, producing the world’s greatest fighter pilots, but the fact that it contributes approximately $2B to the state’s economy every year will continue to infuse the state with much needed economic power.”

Friday Morning Breakfasts, or FMbs, are Valley Partnership’s signature networking event. Held the last Friday of every month, except on holidays, FMbs feature a panel of industry experts discussing themed market and development trends and issues.

During the recession, the breakfasts fell just above 100 attendees. Last May, Valley Partnership saw a huge increase in attendance for “Land rush: Market Update on the Valley’s Expansion,” featuring Nate Nathan and Vanessa Hickman. Ten of the 12 breakfasts since have been sold out.

Attendance is up by 50 percent. Membership increased by 30 percent.

A look around the room at a Valley Partnership Friday Morning Breakfast (FMB) reveals a who’s

who of Arizona's commercial real estate industry. You’ll see seasoned professionals sitting next to up-and-comers, and though these are an effective networking tool, Valley Partnership took the concept to the next level.

It created the Valley Partnership Advocates Program for young professionals. The program is a nine-month-long course for a “class” of 20 people under the age of 35 to meet with a new industry leader every month.

The inaugural program began last August and has included sessions hosted by prominent figures from DMB Associates, Inc., Vestar, Arizona State Land Department, Ryan Companies, Sunbelt Holdings, Evergreen Development, ASU and Macerich/WDP Partners. Many of the sessions were hosted by board members, including one held during a board meeting. “I did not understand the power of Valley Partnership and the people behind it until I attended that board meeting,” says advocate Nicole Mass, 35, Kitchell’s director of marketing.

The feeling is mutual. Bruce Pomeroy, founding principal at Evergreen Devco, has worked in the industry for 40 years. During that time, he has trained many young hires and has taught classes for the International Council of Shopping Centers. Pomeroy says of the session he hosted at Centerpointe in Goodyear that "the ‘students’ were very engaged and asked good questions.”

“I believe the most important issue was that the advocates wanted to spend more time with the developers during each monthly event,” says Vice President and General Counsel to Maven Universal Brett Hopper, who helped design the program. “We want to provide the advocates a greater opportunity to interact with senior executives and

create long-lasting relationships.”Stephanie Stephens, 27, marketing

and project coordinator at Buesing, says the mentors emphasized the importance of getting involved in the real estate community. That typically starts with something as simple as the monthly Valley Partnership breakfasts, where Stephens heard about the program. Easton Mullen, 37, started his general contracting company Mullen Construction and Development in 2006 and has since built capital with the goal of becoming a developer. The advocates program, he says, created a foundation

of contacts to use while his company evolves. “You can’t call these people up on the phone,” he says, “but if you’re part of the program, you can.”

The mentors encouraged community involvement and engagement within Valley Partnership’s committees and leadership roles. CBRE Sales Assistant Chris Marchildon, 28, was approached by board members at the suggestion of CBRE Executive Vice President Barry Gabel, about joining Valley Partnership’s Advocates Program.

“One of the first things I was told in this business was to ‘be a sponge,’” he says. “The second was to develop as many good relationships as you can along the way. Through the program, I was certainly provided the opportunity to learn success stories from the ground up as well as the chance to ‘soak up’ as much information as I could.”

Recent Denver transplant Kelly Kaminskas, 34, senior vice president at FirstBank, used the advocates program as an introduction to the industry. “It would have taken me years to piece together the information I received by being part of this group," she says.

Tuition is $150. Applications are available on Valley Partnership's website through July.

68 | May-June 2014

It tAKes tWO:VALLEy PrINCIPALs HOsT yOUNG PrOFEssIONALs IN INAUGUrAL ADVOCATEs PrOGrAM by AMANDA VENTUrA

The "Class of 2014" advocates visit DMb Associates' masterplanned community Eastmark.

VALLEY PARTNERSHIP

70 | May-June 2014

VALLEY PARTNERSHIP

When there’s a development-related issue at stake, one of the first organizations that

municipalities call is Valley Partnership. Advocacy for responsible development is the driving force of the 27-year-old organization, which takes a stance on behalf of its busy members. The issues range from state legislation and statewide issues such as land reform efforts, Government Property Lease Excise Tax (GPLET), copper theft and economics of Luke Air Force Base. Leading into 2014, the organzation is in the midst of

community district financing.Many members have taken turns

sitting on VP’s advocacy committees, with focus on city and county to federal influence, but no one has more ears to the ground than DMB Associate’s Karrin Taylor. Taylor is the immediate past chair of the board and has sat on multiple committees.

“(VP’s advocacy) started out many years ago working at the local level and coming out of an era when anything related to development or developers wasn’t seen in best light,” says Taylor.

The most robust is the City County Committee, Taylor says, which is represented by a laundry list of the Valley’s municipalities. About four years ago, Valley Partnership got involved on a federal level with the Clean Water and Endangered Species acts. The committee has since turned into a roundtable for the congressional offices as well as a forum for educating members of the development community, Taylor observes.

“Through that legacy we’ve become the voice of the development community and local jurisdictions. Before they proceed

VALLEy PArTNErsHIP AMPLIFIEs VOICE OF rEsPONsIbLE DEVELOPMENT

by AMANDA VENTUrA

with ordinances, they call us,” she says. “Valley Partnership really represents the entire industry. We’re seen as the one that has to look at things holistically.”

Valley Partnership’s working relationship with the cities is based on communication and trust, says the organization’s CEO and President Richard Hubbard.

“Using regular meetings between private sector developers and municipal staffers, we are able to discuss and resolve potential issues related to commercial real estate regulation prior to those issues becoming problems. Through more than 27 years of this process and the resolutions of dozens of complicated issues related to oversight of commercial development, experience has led both developers and the cities to rely on each other’s expertise with the common goal of effectively building quality projects.”

As mentioned earlier, one of Valley Partnership’s slogans is that it advocates for developer issues so its members can focus on business. When an issue arises, Taylor says, Hubbard will give a “call to arms” so members are aware of an issue and committee members can work on an industry response.

“We rely on them to take the leadership role and managing issues as they arise,” Taylor says. “The relevance of the organization as a reasonable and educated voice of issues facing the development issue (is its greatest achievement).”

Taylor serves as President of the Foundation for Environmental and Economic Progress (FEEP), which represents major landowners and stakeholders across the country in the advancement of balanced federal environmental law and policy on endangered species acts and wetlands issues. Hubbard served as the Deputy Arizona State Land Commissioner and during his time generated more than $1B in sale and lease revenue for the trust’s beneficiaries, Arizona Public Education. It was the most profitable period of the

department in its century-long existence. In a similar vein, current Arizona State Land Commissioner Vanessa Hickman has been on the board of Valley Partnership for 2.5 years and prior to that was a member in the private sector.

Among the organization’s most significant advances at the legislature, says Hubbard, is the years-long work to preserve the GPLET.

“Our developer partners have used the GPLET tool to develop some of the most important real estate projects in the Valley,” he says, adding, “We are also the biggest watchdog of preserving reasonable impact fees applicable to commercial real estate. Valley Partnership has also worked to support other economic development incentives designed to bring new employers to Arizona including the formation of the Arizona Commerce Authority.”

What comes to mind for Hickman was the Black Mountain Freeway expansion north. Valley Partnership backed the development due to transportations’ role in allowing for economic growth and clearing traffic congestion. On that issue, Valley Partnership drafted a letter to the City of Phoenix advocating for the project to move forward.

Valley Partnership has also taken a

stance on the extension of long-term leases. The organization advocated the legislature change the statutes so that during the recession people could pay their rent with more time.

Land-use and entitlement lawyer Carolyn Oberholtzer, partner at Bergin, Frakes, Smalley & Oberholzter, has been a Valley Partnership member since 2004 and has sat on the board for four years. She works with municipalities and counties on development project phases and has handled entitlements for some of Arizona’s largest masterplanned communities, commercial, industrial and renewable energy facilities. She was retained by Valley Partnership in 2007 to work on a parking calculations issue in Buckeye that she says could have potentially hurt retail development in the city. Oberholtzer worked in tandem with VP’s on-staff lobbyist.

Oberholtzer, with Hickman, sits on the City County committee and worked on impact fees and what the effect would be on large land owners and the ability to plan on infrastructure in the future. The committee worked diligently, Hickman says, on what the legislation would look like.

“We really engaged with this latest go around with the impact-fee legislation,” Oberholtzer adds. “Some of the stakeholder groups were bitterly divided. We got involved to iron out a solution. We’re living with the results. It’s not perfect legislation but that’s where we try to be most helpful. Where there are areas of disagreement between developers and municipalities.”

“I think the members, we, all have our respective missions and goals for the organizations we represent,” Hickman says. “We live in Arizona and we want this to be a beautiful place to work and raise our families, so to understand that development happens in a progressive way and is thoughtful and well-planned and not done in a way that will adversely impact our community partners and state.”

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“Using regular meetings between

private sector developers and

municipal staffers, we are able to discuss and resolve potential issues related to commercial real estate regulation prior to those issues becoming problems.

72 | May-June 2014

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l ast November, members of the commercial real estate industry helped turn a dilapidated, World

War II housing facility into one where a community can thrive.

Just a few months prior to the completion of Valley Partnership’s 2013 community project, the Escobedo at Verde Vista development, it was an abandoned complex that had fallen victim to poverty. Where others saw hopeless housing, Save the Family, Valley Partnership, and Gorman & Co. saw a promising future for a large population of Mesa’s homeless and poverty-stricken community. The three put their heads together and hands to work to bring light and life to this Mesa neighborhood that had been left in the dark.

For the past 26 years, Valley Partnership has selected a nonprofit organization to be the recipient of its community service project. Its 2013 selection was Save the Family, an organization that provides housing and life skills to the homeless and impoverished in the Phoenix Metro.

Even with 25 years and $3.5M of community projects up its sleeve, the Escobedo project brought new challenges and “firsts.” To begin, it was Valley Partnership’s first ground-up redevelopment project. The existing foundations were crumbling and had to be completely rebuilt.

“The original units were built to be housing for British and black Americans that were training at Falcon Field during World War II,” says Jacki Taylor, CEO of

Save the Family Foundation. Post-war, the units served as segregated housing until eight years ago, when the City of Mesa began evacuating the buildings because of decreasing structural stability. Time and money were needed to get the housing to a habitable state and that is where “the dream team” came in.

This development would require extensive construction, which brought Valley Partnership another “first” — the need for city approval and permits for a re-design. Since this was the first community project Valley Partnership had done in the City of Mesa, there were even more new rules and hoops to jump through. Despite the additional work required by all parties involved, the rebuilding of the Washington-Escobedo neighborhood “came together better

than we could have hoped for,” said project co-chair Dena Jones.

The 70 units built were filled almost immediately after construction was completed. A waiting list for families hoping to join the community continues to grow. This project “totally changed the complexion of this neighborhood,” said Taylor. What used to be boarded-up, graffiti-laden and crumbling buildings is now a community of homes, classrooms, computer labs and gym facilities.

“We were all committed to making a difference and working together,” said Jones. “The teams from Gorman, Save the Family, City of Mesa, Tofel Construction and the project sponsors were so wonderful to work with and I cannot thank them enough for giving us the opportunity to take part in the legacy of Escobedo at Verde Vista.”

74 | May-June 2014

COMMUNITy PrOJECTLAys NEW FOUNDATION FOr HOMELEss, POVErTy-sTrICkEN

by LEsLIE HUGHEs

VALLEY PARTNERSHIP

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And the public has definitely noticed. Brian Swanton, AZ Market President for Gorman and Company Inc. said the Escobedo project “has been lauded for its success in revitalizing a boarded-up and vacant eyesore in the middle of this single-family neighborhood.”

What is in store for Valley Partnership’s 2014 project? They are in the final stages of deciding whom to partner up with for this year, but Jones knows that whomever they chose, Valley Partnership will be taking much of what they learned from the Escobedo project with them. “Our partnership is comprised of so many talented and hard working professionals committed to giving back. Engaging the committee members during the time we spend together and growing our committee will continue to be a focus for 2014.”

1. save the Family CEO Jacki Taylor, lef t , project co-chair Dena Jones, center, and Virginia G. Piper Charitable Trust Program Associate Erin Goodman. 2. Volunteers move rubber chips made from recycled tires across the playground. 3. A colorful tile mosaic. 4. Members of the community help paint exteriors of the homes. 5. More than 200 volunteers showed up on Nov. 2 to lay sod, among other tasks. 6. Long-time community project commit tee members Ed Hansen, Morgan realty Advisors, and Janelle schick, schick Design Group. 7. Valley Partnership board of Directors. 8. Logan simpson Design architects Jeff Lothner and Jay Hicks look over a blueprint.

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